The wealth of bitcoin mining titan Bitmain has long been assumed to be north of “huge”. Thanks to its near-monopolization of the ASIC manufacturing business, Bitmain has effectively had a license to print money. This week, Bernstein analysts released a report into Bitmain’s operations. It estimates the Chinese firm to have made $3-$4 billion last year from mining cryptocurrency and for selling the equipment for others to do the same.
Also read: Montana Scores $250 Million Bitcoin Mining Campus
Big Bucks for Bitmain
Ask any serious cryptocurrency miner what brand of ASIC they use and you’ll be greeted by the same two-syllable reply. Bitmain isn’t just the main player in the mining game – it’s pretty much the only one for miners seeking to make a living from their trade. Bitmain is a controversial company for a number of reasons, including its dominance of the bitcoin mining game, which goes against the principles of decentralization. Its mining units are prized, however, for their robustness, effectiveness, and consistent performance.
If Bernstein’s figures are accurate, Bitmain pulled in the same amount as Nvidia last year. Yet while Nvidia is a household name, few people outside of the cryptocurrency space have even heard of Bitmain. Bernstein calculates Nvidia to have made $3 billion in 2017, but points out that it took 24 years for the company to attain that profit level; Bitmain has achieved the same feat in just four years. Neither Jihan Wu or Micree Zhan featured in Forbes’ recent Crypto Rich List, yet there is no doubt that Bitmain’s founders are very wealthy men.
Perseverance Pays Off
While critics may resent the stranglehold their company has over cryptocurrency mining, Wu and Zhan have earned their reward for starting their business when bitcoin was still unfashionable, in 2013, and staying the course. The bulk of the company’s profits came in the past 12 months, as the price of bitcoin soared. For most of this period, Bitmain insisted on taking payment in bitcoin only, and later in bitcoin cash.
Bitmain is a company of a few words, preferring to let its hardware do the talking. Predictably, it had nothing to say in response to Bernstein’s report and earnings estimate. According to Bernstein, Bitmain’s dominance of bitcoin mining and ASIC manufacture stands at around 70%. One of the reasons why Bitmain has been so immensely profitable is that it has been able to hike the price of its Antminers in response to bitcoin’s rise, while the manufacturing costs have remained the same. As a result, a single Antminer went from a few hundred dollars to a peak of $5,000 last year.
The report went on to predict that Bitmain will further increase its dominance of the mining business this year, noting “Bitmain will likely lead the cryptocurrency asic industry and migrate some of its chips to 10nm and the most advanced 7nm. That will make the company one of the top five users of TSMC’s 7nm in 2018, with demand comparable with Qualcomm’s, HiSilicon’s, or AMD’s.”
Do you think Bitmain’s dominance of the mining business is unhealthy? Let us know in the comments section below.
Images courtesy of Bitmain and Bernstein.
Get our news feed on your site. Check our widget services.
The post Bitmain Made a Profit of up to $4 Billion Last Year appeared first on Bitcoin News.
https://news.bitcoin.com/bitcoin-hardware-manufacturer-bitmain-made-a-profit-of-up-to-4-billion-last-year/
