China's 200 richest people list, Wu Jihan and Zhan Ketuan are on the list together

Author: Lai Daojun

Source: Laidao Blockchain

According to the list of the top 1,000 richest people in mainland China in 2019 published by Jiemian, the total wealth of the 1,000 rich people/rich families on the list reached 11.09 trillion yuan (RMB, the same below), with an average wealth of 11.1 billion yuan and a threshold of 2.2 billion yuan. There are 287 billionaires with a wealth of more than 10 billion yuan, and their combined wealth accounts for 69.01% of the total wealth on the list. The first place is still dominated by our familiar face, Jack Ma.

Among them, there is a lack of well-known figures in the blockchain and currency circles. Only two "brothers" from Bitmain made the list. Zhan Ketuan ranked 68th with a net worth of 28.5 billion, and Wu Jihan ranked 160th with a net worth of 160. It is worth noting that Wu Jihan, at the age of 33, entered the youngest echelon of the list.

Join hands with good brothers

The high estimated net worth of Zhan Ketuan and Wu Jihan is largely due to Bitmain's sales profits in the Bitcoin mining machine market.

Bitmain was co-founded by Wu Jihan and Zhan Ketuan in October 2013. In November 2013, Zhan Ketuan independently developed the 55nm Bitcoin mining chip BM1380 in less than 6 months and launched Bitmain's first generation mining machine - AntMiner S1, which is much more efficient than other mining machines.

But what really brought Wu Jihan to the position of mining machine overlord was the cold winter of Bitcoin: in early 2014, fraud and theft occurred in Mt. Gox, the world's largest Bitcoin trading center at the time. The price of Bitcoin was halved in just three months, and in the following year, it fell from a high of US$1,100 to a low of nearly US$200.

The entire cryptocurrency community is like a frightened bird, and no one is willing to pay the expensive electricity bill to mine a digital currency whose value is constantly decreasing. Only Bitmain continues to increase its efforts to update and improve its mining machines.

Therefore, when the price of Bitcoin gradually recovered in the second half of 2015 and miners returned, they were surprised to find that there were almost only Antminers left in the mining machine market. Chang Qia once predicted: "When humans enter the era of cloud computing, society will change, and computers will become a kind of power. Whoever controls the computing power will be the owner of power."

In July 2016, when a New York Times reporter visited China’s Bitcoin mining sites, he took some photos at various mines and found that almost all of the photos he took were of mining machines produced by Bitmain.

With the arrival of the bull market in the second half of 2017, Bitmain has vigorously expanded its business and developed the mining machine industry, further consolidating its dominant position in the mining machine market.

Despite the bear market in 2018, with its previous accumulation, it is still in a leading position in the industry (it feels like a skinny camel is bigger than a horse, grimace). According to the "2018 China Unicorn Enterprise Research Report" released by the Forward-looking Industry Research Institute, as of December 31, 2018, there were 203 Chinese unicorn companies with external financing and a valuation of more than US$1 billion. Among the blockchain-related companies, only Bitmain made the list. With the latest valuation of US$15 billion, Bitmain ranked 12th among China's super unicorn companies (valued at more than US$10 billion) in 2018.

With Zhan Ketuan in charge of internal affairs and Wu Jihan in charge of external affairs, they created a giant enterprise - Bitmain.

A friend in need is a friend indeed

As mentioned above, Bitmain's vigorous expansion during the bull market was based on expanding mining machine production lines and increasing manpower to achieve an increase in the number of mining machines. As of the end of 2018, the mining machine used by Bitmain to support the market was still the Ant S9 released in June 2016. Bitmain has not had any major technological updates on its mining machines for two years.

There is a saying in economics that during a false boom, if the expansion of the factory is not accompanied by an increase in productivity (here refers to the iteration of Bitmain's mining machines), in the recession, the added profits will not be able to keep up with the depreciation of capital goods (the capital goods here are mining machines), which is often accompanied by the dismissal of workers, the contraction of the front line, and the transfer of productivity to sustainably profitable businesses.

As we can see, on December 26, 2018, Dovey Wan, former managing director of Danhua Capital and founder of Primitive, tweeted that Bitmain’s layoff ratio could be as high as 85%, with the Beijing headquarters reduced from 1,000+ to 300, and Shenzhen reduced from 700 to 200. Although Bitmain responded that it was impossible to have such a high ratio, it was indeed laying off employees. As of January 8, 2019, there were still media reports that Bitmain’s layoffs were not over yet.

Shrink the front line, lay off redundant workers, and then transfer productivity to sustainable and profitable businesses. In fact, there are two factions within Bitmain. One is the technical faction represented by Zhan Ketuan, who wants to vigorously develop the AI ​​chip business; the other is the idealist faction represented by Wu Jihan, who wants to participate in maintaining the "world currency" and continue to produce mining machines.

It was fine when the business revenue was high, but once Bitmain experienced a recession, it would face a factional "war". According to former Bitmain employees, there was a "unilateral agreement" between Zhan Ketuan and Wu Jihan: within six months, if Bitmain's AI business could generate enough cash flow, proving that the company's choice of AI business was correct, the AI ​​business line would be retained, otherwise it would be terminated!

Another former Bitmain employee also stated that the differences between Wu and Zhan have existed for a long time, and it is no secret that Zhan wants Wu to be out, but Zhan still needs to "prove that his choice is right and the choice of another supervisor is wrong" to force Wu Jihan out.

Although it may sound like a conspiracy theory, it is highly likely that this will happen due to the pursuit of interests!

One Loss, One Prosperity

In fact, all it would take is for the bear market to continue for a while longer for Zhanketuan and Wu Jihan to part ways.

In a bear market, miners will lack motivation to mine, which means that Bitmain's mining machine profits will continue to decline. It should be noted that more than 80% of Bitmain's revenue is achieved through the sales of mining machines.

What will Wu Jihan do if the income from mining machines is insufficient?

Wu Jihan is a mining tycoon in the cryptocurrency circle and he also made his fortune with Bitcoin. This is because he has full faith in the market and believes that Bitcoin (now Bitcoin Cash) will become the world's currency and realize his own wealth and life value in the process.

This can be seen from his desire to control Bitcoin Cash and compete with Bitcoin as the world's currency. From the end of 2017 to 2018, he continued to use the operating profits of mining machines and the Bitcoin he held to purchase Bitcoin Cash. The result was that he held a large amount of Bitcoin Cash, the number of which was 1 million Bitcoin Cash. This number can be found in the 2018 Bitmain IPO documents.

Therefore, Wu Jihan will not easily leave the cryptocurrency mining machine market, even though he will face losses!

And what about Zhan Ketuan?

Zhan Ketuan himself has a technical background and has been engaged in behind-the-scenes work in mining machine chip design. He rarely appears on the silver screen and is only focused on technology.

With the failure of Bitmain's listing in Hong Kong, it means that it cannot find anyone to take over the large amount of digital assets (mainly Bitcoin Cash). In the bear market, the mining machine business has been severely damaged. Although new machines have been launched, miners are not motivated enough!

However, he has a choice. Although the chip design team led by Zhan Ketuan is not one of the best in China, it is barely in the top ten, which is already remarkable. Moreover, the country is currently in the stage of industrial upgrading and is trying its best to provide a green channel for scientific and technological innovation companies.

For Zhan Ketuan, devoting all his energy to the research and development of artificial intelligence chips is a good direction, which has both a promising future and "money-making potential".

Wu Jihan and Zhan Ketuan have been through ups and downs together, but all good things must come to an end. Fortunately, they have both accumulated capital, and even if they go their separate ways, they will still make contributions in their respective industries. I hope that they will still be on the list next year and will be at the top!