Japanese Internet giant GMO invests $320 million in Bitcoin mining, plans to develop its own chips to disrupt the mining industry

Tokyo-based GMO Internet Group, whose traditional business is boring stuff like domain name registration and web hosting, has also joined the bitcoin frenzy, which many believe is priced in a bubble.

GMO announced today that they plan to invest more than 3.2亿美元to start bitcoin mining in the first half of next year. The current price of bitcoin is around $4,600, and bitcoin miners can earn $10 million a day. The company said that cryptocurrencies such as bitcoin will evolve into "universal currencies" and eventually create a "borderless economic zone."

GMO plans to develop its own mining chips and says they will operate at unprecedented efficiency. Once GMO successfully launches the chip, it will trigger an "arms race" in the field of Bitcoin mining. It is reported that GMO's chip will use a 7-nanometer (nm) node, which consumes four times less energy than the current industry standard 16nm node. Since Bitcoin mining is a competition, once the 7nm node chip is put into use, all other miners must upgrade their equipment to continue the game. "This is clearly a new generation of mining machines," said Diego Guiterrez, CEO of RSK Labs, which is responsible for developing software for miners.

GMO's business model in mining is similar to that of players in the field, such as China's Bitmain. GMO plans to run its own mining machines and rent them out to others. In addition, the company will develop its own chips for sale. GMO's mining farm is tentatively scheduled to be in Northern Europe, probably because the electricity cost here is cheap and the power energy is also sufficient. The company said it will invest 10% of its non-current assets, or $320 million. Bitmain has not yet responded to the news.

A new large-scale Bitcoin mining pool is enough to shake up the entire industry. Miners who fail to upgrade their mining machines in time will end up with a pile of outdated mining equipment and are unlikely to recoup their costs in the future. Guiterrez said:

Miners who are still trying to break even are the most at risk, as they will be 4 times less efficient than others.

He believes that as 7nm node chips are put into factory production, most major players will be able to complete the technology upgrade. He said:

If no one has started upgrading their chips yet, others (mining chip manufacturers) will surely follow suit and produce their own 7nm chips, because once (chip manufacturers) get the new technology, everyone can use it.

GMO's arrival eased fears that bitcoin mining was dominated by Chinese chip designers and manufacturers. For example, the mining pool operated by Bitmain accounts for 30% of the computing power of the entire bitcoin network.