
Sequoia Capital China Said To Invest In Bitmain's $400M Round At $12B Valuation - tristanj
https://www.chinamoneynetwork.com/2018/06/11/sequoia-capital-china-said-to-invest-in-bitmains-400m-pre-ipo-round
======
tristanj
From a couple months ago: _Bitmain, the largest mining hardware company, made
around $4B last year_
[https://news.ycombinator.com/item?id=16449590](https://news.ycombinator.com/item?id=16449590)
[https://www.cnbc.com/2018/02/23/secretive-chinese-bitcoin-
mi...](https://www.cnbc.com/2018/02/23/secretive-chinese-bitcoin-mining-
company-may-have-made-as-much-money-as-nvidia-last-year.html)

~~~
devoply
So what do they want with the fraction of that as an investment? Is it a
political play?

~~~
rebelidealist
For when bitcoin mining cease to be profitable. Bitcoin mining rewards halves
ever so often.

~~~
bertil
I would think of their hardware as cryptographic rather than exclusively
currency related: even without cryptocurrencies around, you might need that
hardware to operate strong encryption, either on your laptop or as a service.
I’m not very clear on what are the next requirement and algorithm coming, but
it sounds like a reasonable area to invest in.

If you look at it slightly differently: this is a company who was able to be
successful in the cut-throat B2B hardware integration business. Even if some
of the key aspects of that hardware might not be relevant, they have
demonstrated agility at scale, which is valuable. Every company with the same
scale in China has been able to negotiate full pivots repeatedly: maps become
platform, search engines conversation agents, integrators turn into high-
street brands, etc.

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RcouF1uZ4gsC
This follows the principle that in a gold rush, you want to be the one selling
shovels. Bitmain is the one selling shovels (mining machines) for the Bitcoin
boom.

~~~
lsiq
Except it is well known that Bitmain mines with its shovels before selling
them. People have reported receiving their machines with dust in them and you
can see the changes in mining difficulty corresponding to when they in-house
mine and then ship the ASICS out.

Anyway, Bitmain better watch out. Cryptocurrencies are now regularly
implementing hash function changes. GPU mining is dying, but not to ASICs but
to the more configurable FPGAs instead.

It is not the strongest that survive, but the ones most responsive to change.

~~~
Geee
That's true. They generally sell their previous generation and mine with the
next generation hardware. That way they won't be left sitting with obsolete
hardware like other mining companies.

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shiado
It would be great if cryptocurrencies regularly switched POW hash functions to
disable hardware companies from trying to monopolize the currency with
hardware patents. I doubt the companies that own BTC core would allow it
though. BTC is now for institutional gamblers.

~~~
gomox
This is actually less secure because the resources needed to perform a 51%
attack on a coin are reduced drastically (as you only need 51% of the hashing
power for one specific algorithm).

~~~
Zpalmtree
This post on the verge hack demonstrates that quite well, suggesting the
attacker only needed as much as 10% of the hashrate, or even as low as 0.4% -
[https://blog.theabacus.io/the-verge-hack-
explained-7942f63a3...](https://blog.theabacus.io/the-verge-hack-
explained-7942f63a3017)

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jason_slack
I just found out about Bitmain's Sophon card, but I don't think you can buy it
yet.

~~~
sanxiyn
As I understand, Sophon SC1 shipped in last October at $600 price, making
Bitmain ahead of other competitors. It seems to be out of stock(?) now.
Bloomberg reported on this:
[https://www.bloomberg.com/news/features/2018-05-17/china-
s-c...](https://www.bloomberg.com/news/features/2018-05-17/china-s-crypto-
chips-king-sets-his-sights-on-ai)

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throwawayqdhd
A perfect example of getting rich from selling shovels in a gold rush

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bsaul
Maybe someone could enlighten me : aren't next gen DLT moving to proof of
stake ? doesn't this mean the cryptographic power needs are going to be
reduced dramatically ?

~~~
Laforet
>next gen DLT moving to proof of stake

This might happen, but Bitmain's future does not appear to have much to do
with blockchain. The company supposedly diversifying into ASIC designs for
AI/ML/flavor of the month applications and is expected to do well in the post-
Trump political environment, hence the attention by investors.

~~~
SkyMarshal
How does the political environment affect them?

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lozaning
If I had to guess I would assume the above poster is referencing that there is
a push within China's political atmosphere to turn inward and start developing
more critical tech at home.

At the heart of all the cheap Chinese android phones is generally a qualcomm
chip, much to the chagrin of the Chinese government. BitMain is likely well
positioned to take advantage of their governments increased attention and
investment in the high tech sector.

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mlrtime
mine the miners

~~~
ddtaylor
Selling the shovels during the gold rush.

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thebiglebrewski
So Bitmain...sells machines...to make money...but wouldn't they just keep the
machines themselves if they were so profitable? I don't get it

~~~
st1ck
So Boeing... sells airplanes... to make money...

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OscarTheGrinch
In a gold rush, sell shovels...

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eb0la
Holly Guacamole! I misread BatMAN not bItmaIn

------
debt
The problem with these investments is when they completely implode, it'll
taint the investor public's perspective on tech in general and likely bring
down the whole sector.

