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Crypto Analyst: Shutdown Of Bitmain’s Mining Operations Isn’t A “Big Deal”
While Bitmain has made forays into artificial intelligence and other budding markets, at heart, Bitmain is a Bitcoin– and crypto-centric mining startup. So, it should come as no surprise that industry participants were shell-shocked when hearsay arose that Bitmain was poised to shutter a number of its mining-related ventures. However, one crypto analyst has claimed that the firm’s reported shift in strategy isn’t “necessarily a big deal.”
Bitmain’s Crypto Mining Operations Reportedly Folding
Although Bitmain is hailed as the de-facto king of all cryptocurrency startups, the Beijing-headquartered firm has reportedly fallen on hard times. In recent weeks, as covered extensively by NewsBTC, (former) employees have claimed that the industry powerhouse has begun to layoff staffers en-masse. While the purge of Bitmain’s Copernicus team, who managed the Bitcoin Cash GO client, and the Israel development team have essentially been confirmed, those familiar with the matter have claimed that the company’s layoffs run even deeper.
Some reports claim that up to 85% of Bitmain’s ~2,500 staffers are on the chopping block, while low estimates stipulate that at least 50% are on thin ice. And although estimates and details vary from source-to-source, an overwhelming majority of reports believe that ~500 of Bitmain’s mining team are on their way out. As to why the startup is aiming to make this drastic change, it has been claimed that conglomerate is purportedly looking to prune its divisions.
Alex Krüger, a leading crypto commentator and researcher, recently commented on the aforementioned rumors, claiming that if they’re true, Bitmain isn’t fini. The Manhattan-based investor noted that the news that Bitmain is trimming its mining team has been blown out of proportion. He claimed that the firm’s self-run pools and proprietary mining business, the branches Bitmain is looking to trim, provide little economic value to the juggernaut, once valued at over billion dollars.
Bitmain is mainly an ASIC chips designer & a mining hardware seller. Operating mining pools provides 1.5% of its revenue. Proprietary mining provides 3.3%. It has 2600 employees, 500+ of work in mining.
Source: Bitmain's IPO prospectus (https://t.co/SWZmKSFgDC) pic.twitter.com/eVZibd86p8
— Alex Krüger
(@Crypto_Macro) December 30, 2018
More specifically, per Bitmain’s H1 financial data, which was routed through its IPO prospectus, operating pools amounted to 1.5% of Bitmain’s revenue. While Bitmain mining crypto for itself, a practice deemed controversial, generated a relatively mere 3.3% of its cumulative revenue. And, considering that the firm has 535 staffers, an approximated 20% of all employees, managing the two aforementioned operations, it is logical why the firm is mulling over these cuts.
Hinting that this move could be a net benefit for the crypto industry (save for the layoffs), Krüger noted that if the rumors are true, second-hand mining hardware may make their way to consumers, as Bitmain’s mining farms change hands. This means that the potential loss in hashrates across the board, catalyzed by Bitmain’s shift in strategy, will be reversed over time, so network security can be upheld.
Related Reading: Bitcoin Can’t Fall To Nor Enter A “Death Spiral” — Mining Rules Deem It So
Bitmain Isn’t In the Clear Just Yet
While Krüger debunked the catcalls regarding Bitmain’s mining arms, local media and inside sources have claimed that the startup isn’t in the clear.
Dovey Wan, the founding partner of Primitive Capital and well-known industry insider, recently took to her well-followed Twitter soapbox to convey a rumor that could turn the cryptosphere on its head. Wan claimed that a local outlet, OriginalPlanet Daily, has stumbled across rumors that both Jihan Wu and Micree Zhan will step down from their co-CEO positions at Bitmain.
If these rumors are true, a businessman with the surname Wang will reportedly take over Bitmain’s CEO slot. Due to Bitmain’s extensive list of employees, there are a number of top brass surnamed Wang. Dovey Wan has suggested the successor in question could be Haichao Wang, the director of product engineering, or Shengli Wang, a former member of Huawei’s board of directors.
Speaking with OriginalPlanet, one familiar with Bitmain suggested that the co-CEO system wasn’t operational, quipping that Wu and Zhan haven’t been able to work in tandem. However, due to the fact that Bitmain hasn’t publicly commented on this debacle, it remains to be seen if these rumors hold their water. Yet, over the past few months, it has been hinted that Wu forfeited the ability to influence Bitmain’s operational decisions, and remains only as a figurehead.
This internal tumult, coupled with regulatory concerns and this industry’s nascency, has led sources to claim that Bitmain’s long-rumored initial public offering (IPO) has stalled, failing to make it off the starting block. Citing “two sources familiar with the matter,” the South China Morning Post noted that it is too premature for any crypto firm to make their way onto the Hong Kong Stock Exchange before the “proper regulatory framework is in place.”
Featured Image from Shutterstock
The post Crypto Analyst: Shutdown Of Bitmain’s Mining Operations Isn’t A “Big Deal” appeared first on NewsBTC.
Iceland’s ‘Big Bitcoin Heist’ Suspect Has Been Arrested
Iceland’s alleged bitcoin mining computer thief Sindri Thor Stefansson, who escaped from prison last week, was arrested in Amsterdam Monday.
CoinDesk
“Big Bitcoin Heist” Fugitive Flees Iceland, Pens Letter Saying He Wants to Go Home
The man who escaped custody in Iceland and got on a passenger plane that was carrying the country’s prime minister says he ‘will be back soon.’
Sindri Thor Stefansson was being detained for his suspected role as the mastermind behind the February theft of 600 cryptocurrency mining rigs, being one of the 11 people arrested in what has been dubbed the ‘Big Bitcoin Heist.’
Stefansson escaped Sogn open prison in southern Iceland earlier this week and made his way to Keflavik International Airport. He then took a flight to Sweden with a ticket under another man’s name. An international warrant has been issued for his arrest.
In a recently penned letter, Stefansson has claimed he is not guilty and that he had been held in Iceland without trial. According to the letter, he is planning to take his case to the European Court of Human Rights. He added that talks are under way with Iceland’s police to allow him to return.
Stefansson’s Letter
In his letter to Iceland’s Frettabladid newspaper, Stefansson said he was not serving a sentence in Iceland and that his period of custody had run out. He claims he was told on Monday that he was actually free to go, but that the police, without explanation, would arrest him if he left the prison.
“I simply refuse to be in prison of my own free will, especially when the police threaten to arrest me without explanation,” he said in the letter, where he claimed that he was forced to sign a statement agreeing to remain in custody.
“I’m not trying to say that it was the right decision to leave, I really regret it… I didn’t expect an international arrest warrant to be issued against me, as I was legally free to leave, and believed it was out of the question that I would be labelled a fugitive. I would never have done this if I didn’t believe I was a free man.”
According to Stefansson, there was no evidence that he was involved in the mining rig heist, ‘only suspicion.’
While being careful not to reveal where he is currently hiding, he wrote that he has ‘a roof over my head, a car, false papers if I want them, and money,’ and that he could be on the run as long as he likes.
“It would be no problem if that’s what I wanted, but I would rather face this in Iceland, so I’ll be back soon,” he claims. Icelandic officials have not yet commented on the letter.
Case Against Stefansson
The cryptocurrency mining rigs in question were stolen during four raids on data centers around Iceland earlier this year. Iceland is a popular location for mining operations because almost 100% of the power generated in the Nordic country comes from renewable resources.
Unlike the large majority of thefts, with mining rigs there is a strong impetus for criminals to keep the stolen goods. Selling them would attract attention and their use can be highly profitable, particularly in a nation that has both cheap electricity and a cool climate (mining rigs consume vast quantities of electricity which this causes them to heat up).
Icelandic police have been monitoring electricity consumption patterns since the thefts. They have also called upon local internet service providers, electricians, and owners of storage units to report any suspicious behavior. The mining rigs, still missing, are worth million.
Image from Shutterstock.
The post “Big Bitcoin Heist” Fugitive Flees Iceland, Pens Letter Saying He Wants to Go Home appeared first on NewsBTC.
‘Big Bitcoin Heist’ Icelandic Thief Escapes Custody…Through a Window
The man allegedly behind February’s bitcoin mining rig robbery in Iceland has escaped custody. He is reported to have fled the country on a plane alongside the Prime Minister of the nation.
Suspect Boarded a Plane to Sweden With Iceland’s PM
Reports suggest that Sindri Thor Stefansson fled the minimum security facility early yesterday morning. He is then thought to have boarded a plane headed for Sweden using another person’s passport. The guards at Sogn open prison only announced the inmate as missing after the flight had already left.
The BBC reports that Stefansson used a window to escape from the facility in rural southern Iceland. The low-security prison is without fences and allows inmates access to their mobile phones and the internet. Presumably therefore, it was not difficult for Stefansson to arrange transportation for the 95km journey between Keflavik Airport and the prison.
The suspect then boarded a plane headed for Stockholm, Sweden along with Iceland’s Prime Minister. Katrin Jakobsdottir, who was travelling to the Scandinavian nation to meet with fellow Nordic politicians and India’s Prime Minister Narendra Modi, is yet to comment on the security breach at Sogn. Despite managing to travel using another person’s documentation, authorities were later able to confirm the identity of Stefansson using video surveillance at the airport.
Stefansson was being detained for his suspected role as mastermind of the mining rig robberies that occurred in February. He was one of 11 people arrested over what was dubbed the “Big Bitcoin Heist”.
According to reports, around 600 computer systems were taken during four separate raids on Icelandic data centres. The value of the stolen goods is over million and they are still missing. At the time of the robberies, the authorities appealed to energy companies to report any surges in power that might have indicated the miners were being put to use.
In the wake of a suspected crackdown on cryptocurrency miners in China, Iceland was favoured for mining operations thanks to its abundant cheap energy and cool climate. Other areas have also experienced an uptrend in the numbers of cryptocurrency mining operations setting up there. These include Canada and Russia. Like Iceland, these two regions benefit from cheap energy meaning mining units cost less to run. In addition, the cool climate means miners can save on the cost of extraction units needed to keep the rigs at an ambient temperate. Operations in such areas are considerably more profitable than they are elsewhere.
Although still on the run, there is currently an international warrant out for the arrest of Stefansson.
Image from Shutterstock.
The post ‘Big Bitcoin Heist’ Icelandic Thief Escapes Custody…Through a Window appeared first on NewsBTC.
‘Big Four’ Firm Deloitte Appoints New Head of Blockchain Services
Deloitte has announced Linda Pawczuk as its new blockchain lead, following the departure of Eric Piscini from the role.
CoinDesk
‘Big 4’ Accounting Giant PwC Accepts its First Bitcoin Payment
‘Bitcoin has developed as a broadly accepted form of settlement,’ PwC’s APAC chairman.
The post ‘Big 4’ Accounting Giant PwC Accepts its First Bitcoin Payment appeared first on CryptoCoinsNews.
‘Big Four’ Firm KPMG Joins Blockchain Advocacy Group
‘Big four’ consulting firm KPMG has announced it is joining the industry trade group, the Wall Street Blockchain Alliance.
CoinDesk
UBS CEO: Blockchain to Play ‘Big Role’ in Reshaping Industry
The CEO is the latest to raise doubts about cryptocurrency, which also banking on blockchain to make his business simpler and easier.
CoinDesk
BlackRock CEO Larry Fink Is a ‘Big Believer’ in Cryptocurrency
Larry Fink, CEO of the world’s biggest asset manager, struck an optimistic tone on cryptocurrencies in a new interview.
CoinDesk