Bitmain's 2018 Annual Report: Expansion has problems, return to core business, and achieve refined operations

Editor's note: Today (January 21), Bitmain reviewed the past year's business in its official English blog, and finally stated that the company's business has expanded to the point where a decision must be made: "We decided to rationalize our business before the end of 2018. Our portfolio and business lines have expanded to the stage where we must make a choice, and 2019 is the time to make a choice. We began to optimize our business, streamline processes, and refocus on the core businesses and activities that best reflect our vision."

This article can help readers understand the products and layout launched by Bitmain last year, so Odaily Planet Daily combined its previous Chinese review and made a translation without changing the original meaning. It should also be noted that Bitmain did not elaborate on its decision to "streamline" its business, and has not yet responded to rumors of "large-scale layoffs" or "CEO changes" through announcements. Perhaps these questions can only be answered after Bitmain successfully goes public.

The original text comes from bitmain and Bitmain Technology, written by Bitmain.

Translator | Qin Xiaofeng

Editor | Lu Xiaoming

As we enter the new year, we reflect on Bitmain’s past 2018 and have some expectations for the coming year.

Over the past year, we have been working to accelerate the creation of a platform and environment designed to achieve exponential growth. We hope that our innovations will enable everyone, everywhere in the world to benefit from the mining of digital currencies. As we have always insisted, our mission is to ensure the stability and security of digital currencies and promote wider adoption, use and efficiency.

We’ve had many significant developments over the past year, including our application for a listing on the Hong Kong Stock Exchange. In fact, there are so many things that happened over the past year that we can’t even list them all – we often forget the little things that can make a big difference. So, we’ve rounded up the most memorable milestones that make us proud.

7nm ASIC and Asicboost

Over the past year, we have launched a number of exciting products and continued to explore ways to improve mining efficiency. Among the many product and software upgrades we have released, the new firmware that supports AsicBoost optimization is the most notable.

The new firmware can deliver significant savings on energy costs, and in addition to the S9, its features are available for other BM1387-based models, including the R4, S9i, S9j, T9, and T9+.

But we think the biggest milestone in 2018 is the next-generation 7nm ASIC chip, designed specifically for SHA-256 mining. The 7 nm chip uses an Exposed Die packaging solution, which is more efficient and faster in heat dissipation, greatly improving the overall performance of the mining machine. This chip is integrated into our recently launched Antminer S15 and T15, achieving significant improvements in performance and power consumption. For the entire industry, this not only accelerates the development of the digital currency mining industry, but also provides miners with better mining tools.

(Note from Odaily Planet Daily: The Antminer S15 has a computing power of up to 28TH/S, an energy efficiency ratio of 57J/T, and uses a 7nm custom chip BM1391. A single chip integrates 1 billion transistors, and the performance of a single chip has been significantly improved)

IPO

On September 26, Bitmain uploaded the A1 prospectus on the official website of the Hong Kong Stock Exchange, and officially launched the plan to list on the main board of the Hong Kong Stock Exchange. According to the prospectus, Bitmain's adjusted net profit for the full year of 2017 and the first half of 2018 was as high as US$950 million.

In the future strategy of the prospectus, Bitmain stated that part of the funds raised will be used for the research and development and expansion of production of high-tech AI chips and AI applications. This will not only meet the vigorous demand for chip computing power in the era of artificial intelligence, but is also consistent with the high-tech development policies of countries around the world, and will help the company further develop into a world-leading high-tech chip design company.

AI

We started researching AI in 2015 and released the BM1682 chip in the first quarter of 2018. This is our second chip for AI applications. It has a peak computing power of 3TFlops and a power consumption of 30W. It is Bitmain's second-generation artificial intelligence chip for deep learning. It can exist independently of the X86 CPU and support secondary development by customers. It has a single-chip eight-way H.264 and H.265 decoding capability, supports hardware acceleration for video image post-processing, supports Ethernet and PCIE multi-chip interconnection, and is easy to scale horizontally. Compared with the first generation, it has higher density and greatly improved actual performance.

Based on the BM1682 chip, Bitmain has developed the deep learning acceleration card SC3, intelligent server SA3, face recognition server SS3-C3 and embedded AI mini machine SE3, which are widely used in security, Internet, campus and other fields.

Later we released the BM1880 chip for AI.

BM1880 is a deep learning inference artificial intelligence chip focused on edge applications. It can provide 1TOPS computing power for 8-bit integer operations. With Winograd convolution acceleration, it supports up to 2TOPS@INT8. The specially designed TPU scheduling engine can effectively provide extremely high-bandwidth data flow for all tensor processor cores.

Focusing on the terminal AI chip BM1880, a number of AI terminals for edge computing, such as edge computing boards and USB modules, were launched at one time. Through the combination, Sophon products can recognize faces, objects, license plates and even fingerprints while providing AI-level security. We have already seen some results brought by this technology, and we can't wait to see what's to come in 2019.

invest

Last May, we announced our partnership with Circle Internet Financial and led its Series E funding round with $110 million. Circle is a global crypto-financial company whose mission is to change the global economy as we know it. With the support of the CENTRE open source framework, they have tokenized the US dollar and pioneered a token, USD, which brings us one step closer to realizing the Internet of Money era.

Through our partnership with Circle, we are also helping CENTRE in its efforts to launch more reliable fiat-backed stablecoins that will provide financial interoperability around the world.

Funding open source developers and projects

We continue to look for promising open source developers, projects, and organizations. For those we see as having potential and who share our vision, we fund them, often with no strings attached. This means a lot to our community and to ourselves, as it gives us confidence that these technologies can be realized in the future, so we can provide financial support for projects that excite us. While it is our policy not to disclose who we have funded or how much we have funded in order to respect the privacy of individuals or organizations, you can be sure that we have invested a lot in these areas and plan to invest more in 2019.

The Big Fork

Needless to say, the BCH and BSV split was a major topic in the global cryptocurrency space last year. It’s exciting that despite the different consensus on the future and improvements of cryptocurrencies, there was no so-called “hash war”. Having gone through a similar (but much longer) conflict ourselves about the future of Bitcoin just 18 months ago, we understand the BSV community’s decision to split and freely pursue their dreams. Crypto needs a strong, flexible, and complex ecosystem to be accepted, and we look forward to 2019.

transparency

We announced the shipping details of our first ASIC-based Zcash miners on Twitter, beginning a radical transparency experiment that has shaped our transparency policy.

This policy governs how we mine and how we communicate with the community. This would not be possible without the Zcash community proactively and genuinely engaging with us. We remain committed to exploring the best ways to communicate and collaborate with the communities we are a part of.

(Note from Odaily Planet Daily: In July, Bitmain released a "Transparency Statement on Freight and Mining-Related Business Policies", committed to improving business transparency, promising full disclosure of self-mining algorithms, zero tolerance for secret mining, never attempting to mine "empty blocks", and public disclosure of new mining machine freight and quantity information.)

Bitmain Crypto Index

We recognize that our community of miners, users, and investors need performance reference points for the largest and most liquid cryptocurrencies. As a result, we launched our institutional-grade cryptocurrency index service in November. The index publishes two prices, a real-time spot price that is updated every second, and a daily reference price that is published once a day at approximately 10:00 AM Hong Kong time, 24/7/365. This is just one way we are committed to serving our amazing community.

Expanding the US market

This summer, we broke ground on a new blockchain data center in Rockdale, Texas, which is a significant investment in the local, county, and state economies of the United States, and in November, we opened a new facility in Washington, D.C. These are key components of our strategic investment in the U.S. market.

Bitmain Washington facility: Image from Bitsonline.com

Sponsor the Houston Rockets

Of course, how can we forget AntPool’s sponsorship of the Houston Rockets? In September 2018, the Houston Rockets accepted Bitmain’s AntPool’s sponsorship for its 2018-2019 season and used Bitcoin Cash (BCH) for payment, making it the world’s first NBA team to support BCH payment sponsorship.

Who says mining is only work and no entertainment?

Grand Slam

In the 2018 three major international college supercomputing competitions ASC, ISC and SC, the Tsinghua University supercomputing team won the championship in all three competitions, achieving another "Grand Slam" after 2015. This is also the 11th championship won by the Tsinghua University supercomputing team in these three major international college supercomputing competitions. As a high-performance computing chip company, Bitmain has sponsored and provided hardware product support to the Tsinghua University supercomputing team since 2016, and the two sides have maintained close communication. In addition, the School of Economics and Management of Tsinghua University decided to establish a digital financial asset research center, which was donated by Bitmain to the School of Economics and Management of Tsinghua University.

Preparing for the future

We decided to rationalize our business before the end of 2018 to prepare for the future. Our portfolio and business lines had expanded to the point where we had to make choices, and 2019 was the time to do so. We set out to optimize our business, streamline processes, and refocus on the core businesses and activities that best reflect our vision. As a company, we will become more refined and more focused on our purpose, and we look forward to 2019 to see what our collective efforts can achieve in this way.

So, what’s the outlook for this year?

Although the market has its ups and downs, we believe that this is part of the change that is necessary to build a stronger ecosystem. In fact, if we look back, blockchain technology has gone through a lot of difficulties in the first ten years, and the industry has also experienced many challenges, but it has never stopped developing.

While many have been vocal about the devaluation of cryptocurrencies, we believe this is a result of market stability and maturity. In fact, we are beginning to see well-known investment institutions enter the market with different digital assets.

We are gradually moving towards an Internet of Money era, where money can move quickly and easily across borders without relying on traditional institutions. We believe that ASICs will continue to play a fundamental role in securing the complexity of cryptocurrencies and turning them into useful and trusted assets for everyone.

This year, we also expect crypto-finance to see wider adoption. First, regulators will recognize that cryptocurrencies can play an important role in our financial system and change the view that they pose a threat to financial stability. We have recently seen this with the UK government proposing to give financial regulators greater powers to regulate crypto assets and the Hong Kong SFC introducing the first set of rules to regulate the market. Well-thought-out regulation can help more people and institutions benefit from new global digital currencies.

Blockchain technology has continued to develop and overcome many challenges to reach where it is today. This year, we can expect its development to revolve around blockchain applications.

As applications continue to grow, the market value of the entire industry will also grow. The exponential growth of blockchain user traffic also requires greater data processing power, hardware acceleration, parallel computing technology and blockchain integration. As the world's leading high-performance computing chip company, we believe Bitmain will meet this demand and continue to develop on the basis of existing innovations such as 7nm ASIC

Our mission is to produce hardware and software as part of our commitment to contribute to the security and stability of multiple cryptocurrencies. This year we will also continue our efforts and contribute to a distributed, decentralized world that empowers individuals with human rights.