Photo/Shetuwang

March 5 (NBD) -- Chinese bitcoin miner Bitmain Technologies Limited (Bitmain) comes under the spotlight as a bitcoin farm with former Bitmain co-CEO Micree Zhan as a senior official appeared in southwest China's Sichuan Province, reported blockchain media Odaily.

It is said that Zhan deployed 100,000 bitcoin mining machines two months more before the wet period comes. At full operation, they are able to generate computing capacity of 1.33 quintillion hashes per second (EH/S), which is equivalent to the total of that of Huobi Pool and around 3 percent of bitcoin.

Industry insider Zhao Yiming (alias) disclosed that previously the cost of electricity was relatively high for Bitmain. But they finally managed to secure a cheaper one. The Sichuan-based bitcoin farm will start operation in May and the electricity price will be below 0.2 yuan (29.9 cents) per Wh.

Odaily also learned that the miners will be S11, S15 and T15 models, which are all provided by Bitmain.

Bitmain said it is not a personal act but a common commercial cooperation between companies when reached by Odaily on Monday.

The company behind the Sichuan-based mining farm mentioned by Zhao is said to be a company newly founded in Hainan in November last year.

According to business regulatory information, a Fujian-based fully-owned subsidiary of Bitmain and legally represented by Zhan has acquired a 40-percent stake in the Hainan-based company. After the deal was closed, Zhan became a senior official of the Hainan-based company. But the largest shareholder of the Hainan-based company is unfamilar for industry players. 

Zhan's move to lead a bitcoin farm might be an advancement of Bitmain's co-mining policy announced last year as a way to struggle through a harsh winter by disposing its miners in stock.

A source familiar with the matter noted that in prior cooperation, Bitmain required partners to pay electricity fees for it in advance so as to reduce cash investments.

However, the co-mining business didn't go very well, said a bitcoin farm owner Lu Yuan (alias), claiming Bitmain offers only machines and no deposits. That's why few people want to forge a partnership with the company, Lu added.

Bitmain rarely discloses its operation to the outside world, making it hard to know the truth. But a photo depicting Zhan crying at the annual meeting of last year was self-evident.

Currently, Bitmain is in the worst scenario since its foundation.

Public information shows that the computing capacity of Bitmain's Antpool and BTC.com is 25 percent of the world's total bitcoin mining capacity on January 28. It is worth noting that the number exceeded 50 percent at one point.

Last December, Bitmain was said to cut around 1,700 employees, around 50 percent of its workforce, and fired all the BCH employees. In addition, it suspended the mining operation in Texas in the same month, reported local media.

Lu Yuan disclosed to Odaily that Bitmain has been trying to increase its cash flow. At the end of last year, sources said Bitmain is developing a cloud computing platform called BitDeer, which will help sell packaged projects to customers.

With regard to the changes in bitcoin mining business, Lu further noted that the business that run by Bitmain's former co-CEO Wu Jihan was not professional as the idle team couldn't find cost-effective electricity and offered lame operation and maintenance services. Now the business has been separated from Bitmain and is headed by Zhan.

On one hand, Bitmain is trying to turn to an asset-light model and revive its cash flow. On the other hand, it focuses on the core business and will launch its Antminer S17 soon.

Email: tanyuhan@nbd.com.cn