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On May 21, the Financial Committee of the State Council decided to crack down on Bitcoin mining and trading. As soon as the news came out, the price of Bitcoin plummeted, the currency circle was in mourning, and the Bitcoin mining circle was like a frightened bird. On May 25, the Inner Mongolia Development and Reform Commission issued the "Eight Measures on Resolutely Cracking Down on and Punishing Virtual Currency "Mining" Behavior", which cracked down on Bitcoin mining and trading activities. At almost the same time, several major domestic mining pools, including Litecoin Pool, BitDeer, Huobi Mining Machine Mall, and Bitmain Ant Pool, announced that they would block IP addresses in mainland China and stop providing services to customers in mainland China. These major domestic mining pools have begun to move quickly and have begun to transfer domestic mines overseas. Among them, Jihan Wu, the founder of Bitmain and current chairman of BitDeer, was once a Bitcoin mining tyrant. He completed a victorious escape before China's most stringent crackdown on mining policies came out. At the beginning of 2021, Wu Jihan sadly left Bitmain, which he founded, and took away BitDeer, BTC.COM mining pool and Bitmain's overseas mining farms. In February 2021, Wu Jihan sold the domestic mining pool BTC.COM to 500.com Lottery. After cashing out at a high price, Wu Jihan only had BitDeer, which focused on overseas mining farms, left. This shows that Wu Jihan had already anticipated that China would introduce measures to crack down on Bitcoin mining and is the fastest miner in the country. Why is Wu Jihan so foresighted? How did he become the overlord of the mining industry? Why do Americans regard him as a terrorist? Wu Jihan was born in an ordinary family in Chongqing in 1986. Since childhood, Wu Jihan has been regarded by his parents as the child of other people's families and a super academic master. In 2005, Wu Jihan graduated from Nankai Middle School, the most prestigious middle school in Chongqing, and was admitted to Peking University. Young Wu Jihan At Peking University, Wu Jihan studied economics and also took psychology as an elective. When he was in college, his dream was to become an investor. In 2008, the US subprime mortgage crisis broke out, triggering a global economic crisis; in 2009, 23-year-old Wu Jihan graduated from Peking University; that year, many college students became unemployed upon graduation. After all, as a top student at Peking University, Wu Jihan got his wish and joined Huaxing Capital to work in venture capital. The year Wu Jihan joined the company, Huaxing Capital turned its investment direction to the Internet and bet on China's mobile Internet industry, which gave him the opportunity to learn about the latest Internet technologies and business models. In 2011, by chance, Wu Jihan, who was curious about new things, discovered Bitcoin. At that time, it was not easy to discover Bitcoin. It was something that a small wave of crypto-tech punks in the United States were fascinated with, and only a few dozen people in China knew about it. Wu Jihan, who naturally yearns for freedom, is deeply attracted to this non-government-issued digital currency. Wu Jihan spent three days studying the underlying technical logic of Bitcoin, and based on this, he concluded that Bitcoin could either rise hundreds of times or return to zero. So, Wu Jihan took advantage of his investment and raised 100,000 yuan from relatives and friends, and exchanged it for Bitcoin on Taobao and Mentougou Exchange. At that time, the price of Bitcoin was about US$10 per coin. At that time, people all over the world discussed Bitcoin in a forum called Bitcointalk. Satoshi Nakamoto, the inventor of Bitcoin, also communicated with developers from all over the world in this forum. Wu Jihan took the initiative to apply and became the moderator of the Chinese version of the Bitcointalk forum. He noticed that there was a person named Chang Jian who often promoted Bitcoin in the forum. After seeing the wonderful article, Wu Jihan even gave Chang Jian a Bitcoin reward. In this way, the two formed an indissoluble bond. Chang Qia’s real name is Liu Zhipeng. He is a civil servant at the Nanning Institute of Land and Resources Planning. He also has another identity, that is, an outstanding science fiction novelist. Chang Qia came into contact with Bitcoin in order to write science fiction novels. After Wu Jihan and Chang Qia met offline, they came up with the idea of creating a Chinese Bitcoin forum; so the two of them pooled a few thousand yuan and rented a server, and the country's earliest Bitcoin information website, Babbitt, was born. At the beginning, only Chang Jian and Wu Jihan wrote articles on it, and there were only a few dozen early users. The energetic Wu Jihan translated Satoshi Nakamoto's Bitcoin white paper "A Peer-to-Peer Electronic Cash System" into Chinese. Li Xiaolai also translated the Bitcoin white paper. The version translated by Wu Jihan is the most widely circulated, which also established his position in the currency circle. However, Wu Jihan was still a loser at that time; his success required a Bitcoin bull market and a genius man. In June 2012, Butterfly Labs in the United States announced the manufacture of integrated circuit (ASIC) mining machines, the computing power of which can crush ordinary CPU and GPU mining machines. Butterfly Labs does not intend to open source the mining machine code, and does not even want to sell the mining machine publicly. If this is true, Butterfly Labs is very likely to monopolize the computing power and launch a 51% computing power attack on Bitcoin, which can destroy Bitcoin.
Just when the Bitcoin community was in a panic, two Chinese men stepped forward. One was Jiang Xinyu, a young genius from the University of Science and Technology of China, whose online name was "烤猫" (see: "Young genius became a generation of "mining tyrant", made 200 million in 3 months, but disappeared mysteriously!"), and the other was Zhang Nangeng, a doctoral student at the Beijing University of Aeronautics and Astronautics. In July, "Baomao" posted a message on the Bitcointalk forum that he was able to develop an ASIC mining machine, but lacked funds and needed to raise 1 million yuan. "Baked Cat" divided the company into 400,000 shares, with 0.1 bitcoin per share, and listed the company on the GBLSE exchange.
This news was seen by Wu Jihan. As a venture capitalist, he has a keen sense of smell. Wu Jihan realized that mining machines were a lucrative business, but the success rate of investing in chips was only 30%, so he was still willing to take a chance.
Therefore, he bought 15,000 shares of FC Company, betting his entire fortune on it, fearing bankruptcy if he failed.
Fortunately, Wu Jihan made the right bet. In December 2012, the high-performance BakedCat mining machine was launched, and the BakedCat company achieved great success.
In 2013, the mining farm of FC Company monopolized more than 40% of the computing power of Bitcoin, which caused panic in the community. Later, FC Company only retained 20% of the computing power and sold the rest.
At its peak, FC's mine mined more than 40,000 bitcoins a month, which caused FC's stock to surge 500 times. In a few months, Wu Jihan became a multimillionaire.
FriedCat was the man who helped Wu Jihan make his first pot of gold, and FriedCat himself also made 200 million in just three months. However, due to the obstruction of the development of FriedCat's second-generation mining machine and the failure of the investment in the mine, FriedCat eventually disappeared and faded out of the mining circle.
This is another wonderful story. Friends who are interested can read "A young genius became a "mining tyrant", earned 200 million in 3 months, but disappeared mysteriously!" Having tasted the sweetness of the BakeCat mining machine, in April 2013, Wu Jihan resigned from his investment job at Huaxing Capital and devoted more energy to the mining business.
He also spent several million yuan to pre-order Zhang Nangeng's Avalon mining machine, but this time it was not delivered on time, causing Wu Jihan to suffer heavy losses.
At this time, Wu Jihan suddenly realized that if he wanted to mine, it was not enough to be just an investor. He must have his own mining machine and must firmly control the mining machine technology in his own hands to have an absolute chance of winning. Wu Jihan first looked for his old friend Chang Jian, but he did not want to give up his job in the system and only wanted to focus on maintaining the Babbitt website. What Wu Jihan lacks is the technology to manufacture chips, so he is willing to give up most of his equity to introduce technology. At this time, a top student from Tsinghua University named Zhan Ketuan appeared in front of Wu Jihan. The two hit it off and reached a gentleman's agreement: Zhan Ketuan would not receive a salary, Wu Jihan would provide the funding, and if the mining machine developed met two key indicators, Zhan Ketuan's technical team could get 60% of the stock price.
Wu Jihan’s willingness to give 60% of his equity to the technical team undoubtedly shows his grand vision. In this way, Bitmain came into being in October 2013. Zhanketuan's technical strength did not disappoint Wu Jihan. On November 11, 2013, Bitmain’s first-generation Antminer S1 was launched and quickly captured the market. The chip development of the BakeCat mining machine, which Wu Jihan once invested in, lagged behind, giving Bitmain an opportunity.
However, just one month later, Bitcoin suffered a devastating blow.
In December 2013, the central bank and five other ministries jointly issued a notice on “Preventing Bitcoin Risks.” Bitcoin prices fell immediately, entering a three-year bear market. Only two months after its establishment, Bitmain encountered a major bear market. This was both a misfortune and a blessing. In a bear market, it depends on who can hold on and come out alive.
The first to collapse was the FriedCat mining farm, whose chips had design problems, causing a large number of chips to be unsalable. However, Bitmain, in 2014, actually iterated 4 generations of mining machines. In 2015, after FC went missing, another chip design genius from FC’s company, Yang Zuoxing, participated in the development of Bitmain’s Antminer. With Yang Zuoxing's Bitmain, it has become even more powerful. That year, the Antminer S7 designed by Yang Zuoxing went into mass production, and Bitmain became the overlord of Chinese mining companies, which established Wu Jihan's status in the industry. At this time, the price of Bitcoin gradually recovered. Yang Zuoxing wanted to join Bitmain, but Zhan Ketuan was only willing to give him 0.5% of the shares. In fact, the 60% that Wu Jihan gave to Zhan Ketuan belonged to the entire technical team. Yang Zuoxing wanted 2%, but Zhan Ketuan disagreed. According to the valuation of Bitmain at the time, Yang Zuoxing could only get 50 million yuan.
In 2016, the two sides parted ways unhappily. Yang Zuoxing chose to start his own business and founded MicroBit, which also developed mining machines and became a strong rival of Bitmain in the future. That year, Bitmain not only produced mining machines, but also launched a new mining pool BTC.COM and invested in another ViaBTC mining pool. Together with its Ant Pool established in 2014, the three mining pools together allow Bitmain to monopolize 49.4% of the computing power of the entire network. Wu Jihan, after FriedCat, became the second generation of mining tyrants. He could easily launch attacks on Bitcoin, which attracted the attention of American developers in the Bitcoin community. A war between Bitcoin core developers and big miners represented by Wu Jihan has quietly begun. This will be a battle that will make Wu Jihan famous around the world. As the transaction volume of Bitcoin increases, the 1M block size designed by Satoshi Nakamoto makes Bitcoin transfer transactions slower and slower. The issue of Bitcoin network expansion has become more urgent with the rise of competing coins such as Ethereum. However, regarding the plan to expand the block capacity of the Bitcoin network, everyone has different opinions. Some people think it should be expanded to 2M, some think it should be 8M, and some think it should be expanded dynamically without upper limit as Bitcoin develops. This is the drawback of decentralized autonomous organizations. Network upgrades require community consensus, but the efficiency of reaching consensus is often extremely low.
The different roles of community members represent different interests, and everyone guides the expansion from the perspective of maximizing their own interests. Political power comes from the barrel of a gun, and whoever has the computing power has the final say. On August 1, 2017, Wu Jihan did not adopt the expansion plan of the Bitcoin US core development team, causing the computing power in the ViaBTC mining pool in which he invested to perform a hard fork on Bitcoin's 478558 block. Bitcoin Cash BCH, officially split from the mother body of Bitcoin, is known as the digital currency invented by Wu Jihan. However, the forked BCH does not carry the isolated witness proposed by the Bitcoin core development team; Wu Jihan's willful hard fork runs counter to the core development team's plan, which makes them very angry. As a result, the core development team in the United States frantically attacked Wu Jihan on the Bitcoin forum and called him Jihad (Islamic Jihad Organization, which is only one letter different from Wu Jihan's name Jihan). Wu Jihan became a terrorist in the eyes of the American development team. But they can do nothing about this world-class mining tycoon from China. What makes them even more frightened is that Wu Jihan is trying to make BCH surpass Bitcoin in price and computing power.
As long as the price of BCH makes it more profitable for miners, miners will turn around and mine BCH, which will lead to a significant reduction in Bitcoin's computing power, making the Bitcoin network more congested, and allowing more people to choose BCH.
However, Wu Jihan's challenge was unsuccessful, and the tenacious trend of Bitcoin in the later period still crushed BCH.
The forked Bitcoin made Wu Jihan famous all over the world. That year, Bitcoin ushered in a big bull market, and Bitcoin Mainland earned more than 5 billion in net profit in one year. The level of profit was astonishing.
2017 was a year when Wu Jihan gained both fame and fortune. In an absolute seller's market, Bitmain's rapid progress also concealed the crisis. What is unexpected is that the outbreak of the crisis only requires a Bitcoin bear market, and will be manifested in endless infighting between Wu Jihan and Zhan Ketuan, at the cost of Bitmain falling from the altar. Since Yang Zuoxing set up his own company, Bitmain has experienced no less than 4 chip tape-outs. Zhan Ketuan was reluctant to give Yang Zuoxing an extra 1.5% of the shares, causing Bitmain to lose billions. What’s worse is that this gave Yang Zuoxing a golden opportunity. The scene that happened to the Antminer and the BakeCat miner seemed to be repeated on Yang Zuoxing’s Shenma miner and Antminer.
In August 2018, Yang Zuoxing launched the Whatsminer M10, whose performance far exceeded Bitmain's flagship Antminer S9.
What worries Wu Jihan even more is that Zhan Ketuan has invested a lot of manpower and material resources in the field of AI, an industry that requires a lot of money in the short term but does not see any income.
Bitmain has rapidly expanded from a medium-sized company with 500 employees to a large company with more than 3,000 employees.
In Zhan Ketuan's view, Wu Jihan's initiation of the Bitcoin hard fork also brought huge losses to Bitmain. When BCH was born, Bitmain used 50,000 bitcoins to exchange all of them for BCH, and at the same time transferred part of the Bitcoin computing power to BCH mining. However, the separated BCH can hardly be called a success. A man named Satoshi Nakamoto, who called himself Satoshi Nakamoto, hard forked BCH and gave birth to BSV.
The BCH community that Wu Jihan spent a huge amount of money to build was forced to give up half of its territory. Although Bitmain has made a lot of money, it has been almost completely ruined by its two founders. The bull market is nowhere in sight, and the huge expenses of 3,000 employees have made the company's account start to feel stretched.
The two founders began to dislike each other and blame each other, thus kicking off a protracted internal struggle.
After half a year of arguing, the two sides finally reached an agreement at the end of 2018. Bitmain launched a wave of layoffs, quickly reducing its staff to more than 1,000 people. Wu Jihan no longer serves as CEO, but only as a company director. He has also established his own new company outside of Bitmain.
But Bitmain did not become better because of Wu Jihan's departure. In 2019, Yang Zuoxing's Antminer quickly eroded the market share of Antminer, occupying 40% of the market share at one point, causing Bitmain to fall from the altar of the mining machine overlord. Seeing Bitmain falling step by step, Wu Jihan could no longer sit still, and neither could the investors behind him.
In October 2019, with the support of investors and employees, Wu Jihan launched a coup.
Wu Jihan became the legal representative and executive director of Bitmain and removed Zhan Ketuan from all his positions.
Zhan Ketuan, who was on a business trip in Shenzhen, immediately returned to Beijing and launched a series of counterattacks.
Throughout 2020, Bitmain spent time in turmoil, experiencing multiple changes of legal persons, fights over business licenses, and the founder bringing security guards to pry open the company's door, among other bloody internal fighting incidents. This internal fight dealt a heavy blow to Bitmain. Its original IPO plan was shelved and its valuation plummeted by 50 billion from a peak of 80 billion yuan to only 30 billion yuan. This was a fight with no winners. Finally, with the coordination of investors, Wu Jihan and Zhan Ketuan reached a settlement.
On January 26, 2021, Jihan Wu officially announced his resignation as chairman and CEO of Bitmain. Wu Jihan and some of the founding shareholders sold half of their shares to Zhan Ketuan for $600 million. At the same time, Wu Jihan also took away the BTC.COM mining pool and BitDeer, which focuses on overseas mining farms. It cannot be said that it is a tragedy that Wu Jihan left Bitmain, which he founded. Between two founders with different business philosophies, a peaceful breakup is the best compromise and choice . In 2021, carbon peak and carbon neutrality became one of the eight key areas of the central government’s economic work. Bitcoin mining, which consumes a lot of energy, is incompatible with the country's carbon neutrality policy. Mining in China faces great policy uncertainty. Having been immersed in the mining industry for nearly a decade, Wu Jihan has a very strong policy sensitivity.
On February 15, 2021, Wu Jihan sold BTC.COM, which was spun off from Bitmain less than a month ago, to 500.com, a US-listed company. At this time, the BitDeer mining farms in Wu Jihan's hands are mainly distributed overseas. After the country introduced a policy to crack down on Bitcoin mining, Wu Jihan had already taken the lead in this great escape of computing power overseas and completed the great migration of computing power. Although Wu Jihan does not currently control the most Bitcoin computing power, his foresight and foresight make him worthy of being a former mining tycoon.
In 2020, 34-year-old Wu Jihan ranked 333rd on the "2020 Forbes China 400 Rich List" with a wealth of 12 billion yuan.
This is the era and opportunity, which gives the best reward to the visionary Wu Jihan! |
