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Bitmain’s Latest Challenger MicroBT Plans to File IPO In 2019

MicroBT, a Shenzhen-based mining chip manufacturer and a new and well-capitalized competitor to mining juggernaut Bitmain, plans to file for an initial public offering in 2019, its founder Yang Zuoxing told Bloomberg in a recent interview.

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It signals that MicroBT becomes the latest China-based mining company seeking to tap public equity markets after Bitmain, Canaan Creative and Ebang International Holdings Inc.

Yang Zuoxing, the former director of chip design at Bitmain, is toiling hard to fight against his old employer and build his 2-year-old startup into the dominant provider for crypto mining chips. After earning a PhD in engineering physics from the prestigious Tsinghua University, Yang’s career has focused on chip design.

In the spring of 2015, Yang joined Bitmain’s team to design the AntMiner S7 and S9, the two most popular bitcoin mining chips manufactured and supplied by the mining giant. But he left the company in June 2016 after Jihan Wu and Micree Zhan, co-founders of Bitmain, disapproved his request for a stake in the business. One month later, he established his own crypto chip company, Micro BT.

Since his departure, the company finds it hard to maintain its dominant position and is losing its technological edge. Bitmain failed to make a breakthrough in chip design over the past two years, although they spent billions of dollars on it.

 “ After Yang Zuo Xing left, Bitmain was unable to produce any new chips successfully. Bitmain’s 16nm BM1X89, 12nm BM1X90, 10nm BM1X93, all failed. Bitmain is working 7nm chips now but gains are minimal.” Blockstream CSO Samson Mow said in a tweet on August 26.

Besides, Bitmain failed to sue Yang over patent rights. The Urumqi Intermediate Court in China’s Xinjiang autonomous region ultimately revoked Bitmain’s patent on grounds that the circuit designs in question were widely used in August.

In contrast, Yang’s own startup is on the fast track to success. MicroBT launched its flagship  Whatsminer M10 using 16nm ASIC chip technology last month.As Yang put it, this product is 30% more efficient than Bitmain’s new AntMiner S9 Hydro. And many industry insiders believe  Whatsminer chips will be the real ‘game changer’.

Yang disclosed in an interview with Chinese news outlet that MicroBT plans to roll out a  a 7nm-chip bitcoin miner in 2019 which is expected to outperform similar products from Canaan Creative and Bitmain.

Despite the bear cryptocurrency market and a slump in miners demand, MicroBT sees a boon in its miner sales.

“ MicroBT brought in more than 500 million yuan in sales in 2017, with over 70 million yuan in net profit. Its miner sales in the first half of 2018 was more than 1 billion yuan, with hundreds of millions yuan in net profits and roughly 100 million yuan in tax.” Yang said.

Yang’s company so far has raised the equivalent of $22 million from individual investors and continues to talk with institutional investors in China for additional funding.

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