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According to recent reports, the mining giant ASIC and the Bitmain encryption operator are currently involved in a downward spiral that could lead to dire consequences for the company. The information available suggests that Bitmain has fired up to 50% of its staff, fired an army of Bitcoin Cash developers and closing down some of their mining operations. An unconfirmed report from media sources in the Chinese language even suggests that the current CEO may resign due to chaos. Join us as we go about what appears to be the fall of Bitmain, or at least, the devastating state the company is in now.
Giant No More
In recent years, Bitmain has been the undisputed king of the ASIC mining hardware and has managed massive bitcoins, Litecoin, Bitcoin Cash and potentially other cryptocurrency mining operations. It is hard to say why Bitmain is in many ways a highly secretive company. As for interaction with the general public, Bitmain was best known for its ASIC series of Aunt miners.
During the peak period of the end of 2017, Bitmain mining devices were often sold and, consequently, sold at double or triple price compared to those of resale. Today, however, as the prices of the encrypted assets continue to remain unchanged and, with the profitability of mines at an all-time low, Antminer devices such as the all-new S11 are currently being sold for only $ 525. According to the mining calculator coinwarz.com, the The extraction of bitcoins with an Antminer S11 and the payment of $ 0.10 per kilowatt for power would imply that 2,161 days or almost 6 years would be needed to equalize. Naturally, this presupposes that the difficulty will not change which will inevitably do so. But based on today's numbers, the outlook does not look good for Bitmain devices.
Read: What is Bitmain? Beginner's Guide to the controversial Behemoth of the ASIC Mining
An investment went wrong
One of the reasons Bitmain could suffer financially is that they presumably made huge investments in Bitcoin Cash. This includes hiring a development staff to support the currency, as well as dedicating mining resources to Bitcoin Cash rather than BTC.
At the beginning of January 2018, Bitcoin Cash was trading for around $ 2400 each. Today it is trading well below $ 200 with its lowest point of around $ 79 in mid-December 2018. While in fact all cryptocurrencies have fallen dramatically since January, Bitcoin Cash seems to have suffered unusually high. Therefore, Bitmain's investments in Bitcoin Cash probably led to an almost total loss.
As a result, reports say that Bitmain has completely wiped out its personal development of Bitcoin Cash, including individuals who were hired a few days earlier. This suggests that management may have just decided to eliminate the department without informing hiring managers.
Read: Beginners Guide to Bitcoin Cash
CEO to resign?
There is an unconfirmed report that has appeared in the Chinese-language media source Odaily which states that the current two CEOs of Bitmain are very likely to abandon their positions and be replaced. The report also suggests that the two CEOs will be replaced by someone with the surname Wang.
Remember, this report is not currently confirmed and current CEOs have so far abstained from commenting on the allegations. In fact, the CEO Jihan Wu has not tweeted since December 2 of this year, only re-tweeting two comments since then, the last of which was almost 2 weeks ago. This in itself does not necessarily mean anything, but the fact that Wu has not denied the accusations is something to be considered.
A world without Bitmain
Currently Bitmain is still an actively operating company. They are still accepting orders for mining hardware, and they most likely still have hardware running in one or more of their places inside or outside of China.
But let's go around and ask ourselves, how would a world be without Bitmain?
If the company ceases operations at some point in the future, it could have a huge effect on all cryptocurrencies in general. Firstly, one of the largest suppliers of ASIC miners would cease to exist, which could have a significant impact on the provision of these devices on the market and their market price.
Secondly, if all Bitmain mining operations were to close, this would have a considerable impact on many cryptocurrencies, in particular Litecoin and Bitcoin Cash in addition to the obvious bitcoin. The sudden and acute reduction in the hash rate could expose the smaller networks to 51% of the attacks if other miners do not enter and collect the slack on the network.
On the other hand, if Bitmain withdraws and the percentages of hashes decrease, this in turn will reduce the difficulty and could incentivate more individual and small miners to return to the sheepfold.
Bitmain is not the only company that produces ASIC miners. Several other contenders have come into play, and there's also a strong possibility that Intel may be involved in the mining industry somehow, but we're not sure what form or shape will come into play at the moment.
The bottom line is this: a world without Bitmain would be very different from the world in which we find ourselves today. It is quite possible that this is only an obstacle for society and things will accumulate in the coming months. This is especially true if the prices of encrypted resources start to increase steadily. Or it is possible that this is only the beginning, and Bitmain is now in decline from which it can not recover. For now, only time will tell.
