Bitmain leads the investment, and ViaBTC, the world's fifth largest mining pool, is also going to be an exchange

Original title: With 20 million investment in Series A, ViaBTC, the world’s fifth largest mining pool, is also going to be an exchange

Recently, Babbitt learned that ViaBTC, a provider of Bitcoin mining pools and cloud mining services, has received RMB 20 million in Series A funding led by Bitmain and followed by individual investors, and plans to launch an overseas Bitcoin trading platform in the second half of the year.

ViaBTC was founded in June 2016. Its main business is Bitcoin mining pool services. Since its launch, it has maintained an average ranking of the top five in the world, and its mining pool computing power accounts for about 7% of the total network computing power. In November last year, it launched cloud mining products, taking the first step in its full industry layout.

Data source: qukuai.com

Founder Yang Haipo is a typical post-90s entrepreneur. He has been involved in Bitcoin since 2011 and is one of the earliest investors and advocates of Bitcoin. He has a strong interest in and deep insights into the technical principles of Bitcoin. With the work experience accumulated in high-distribution, high-concurrency, and high-availability services, Yang Haipo joined Zeus Technology after leaving Tencent and started a Bitcoin-related business. In 2016, he began to devote himself to the deployment and development of Bitcoin mining pools, and then founded ViaBTC. The team has also expanded from one person to the current size of 16 people. Most of the other team members are also from Tencent or have entrepreneurial experience.

ViaBTC founder Yang Haipo

The first PPS+ model is launched to benefit miners

As a rising star in the mining pool team, ViaBTC is also the first mining pool in China to adopt the PPS+ distribution model. Among several mainstream distribution models, the PPS+ model distributes block transaction fees and block rewards to miners together, so that the mining pool can make as much profit as possible and miners can get more benefits. In addition, there is also the PPLNS model for miners to choose, charging the lowest possible handling fee. ViaBTC set a precedent, and domestic mainstream mining pools followed closely and began to implement the PPS+ distribution model at the beginning of this year.

ViaBTC has become well-known in the industry less than a year after its launch. In addition to its technical strength and preferential rates, it also benefited from its outstanding performance in the Bitcoin expansion situation.

Last October, ViaBTC publicly announced its clear position of supporting the Bitcoin Unlimited expansion plan, which had a significant impact on the entire industry and indirectly prompted other mining pools or opinion leaders to express their views and take practical actions to promote the Bitcoin expansion process.

As the world's first public mining pool running the Bitcoin Unlimited program for mining, ViaBTC has taken the lead in launching a transaction acceleration service to help speed up the confirmation of blocked transactions free of charge in the face of Bitcoin network transaction congestion caused by the long-term lack of substantial progress in the block expansion issue.

Launching overseas exchanges in the second half of the year to compete with Bitfinex

Officials revealed that this round of financing will be mainly used for business expansion and team recruitment. In terms of business expansion, ViaBTC plans to focus on launching overseas trading platforms in the next step.

In the entire Bitcoin industry chain, "mining" at the bottom of the industry chain and "trading" at the top are the two basic directions. Talking about the reason for launching the exchange, Yang Haipo said that as an important step in the layout of the entire industry chain of ViaBTC, compared with mining, the exchange faces a wider customer base and has greater value. He said frankly, "The existing mining pool business has thousands of real and effective users, while the audience of the exchange is far larger than miners and potential mining investors, and the number of users is in the hundreds of thousands to millions."

"At the same time, technical strength can be fully utilized." In Yang Haipo's view, the matching speed of the trading platform is particularly important, and many problems existing in the existing trading platforms can be improved through technology.

ViaBTC Exchange is benchmarked against Bitfinex, and its goal is to become a professional USD exchange. Why focus on overseas markets? Yang Haipo believes that digital currency is a global market, and the influence of the Chinese market in the Bitcoin community is not as great as imagined. At the same time, domestic platforms of all sizes are in fierce competition, while the international market is relatively blank. For ViaBTC, this is a great opportunity to stand out.

“Bitcoin is still in a stage of rapid development, with a large number of new users entering the market. It is much better to find opportunities in such an industry than to find users in an existing market.”

Yang Haipo also revealed that in order to lay the foundation for expanding the overseas Bitcoin trading market, it is expected that the domestic version of the RMB-Bitcoin exchange will be launched in May, and competing currencies such as Ethereum will also be considered for listing.

Bitcoin's status is challenged, and expansion is imminent

When asked about his views on the current industry, Yang Haipo believes that the biggest problem in the industry is capacity expansion. As the capacity expansion situation becomes stalemate, the status of Bitcoin has been severely challenged.

“If Bitcoin cannot achieve expansion, block congestion will lead to user loss, and Bitcoin users will abandon Bitcoin and turn to other competing currencies.”

——This is also the general view of supporters of expansion.

This is indeed the case. In the past two months, the altcoin sector has risen in turn. Price is not the only indicator. Another key indicator for judging the value of a currency is the number of on-chain transactions. According to Yang Haipo's observation, excluding the pure speculation of individual currencies that led to price increases, Ethereum's on-chain transaction volume has reached 40% of Bitcoin.

“The appreciation of Ethereum is brought about by the increase in the number of real users and transaction volume. Its search volume, community activity and other indicators are also expected to surpass Bitcoin. This is very dangerous for Bitcoin.”

Ethereum on-chain transaction volume (data source: etherscan.io)

Bitcoin on-chain transaction volume (data source: blockchain.info)

In Yang Haipo’s view, this is the first time that Bitcoin has shown a downward trend in its eight years of existence. The current stalemate in Bitcoin expansion has forced ViaBTC to take defensive measures – focusing on other competing currencies, rather than placing all bets on Bitcoin as before.

Yang Haipo believes that the key to the difficulty of capacity expansion is that miners are a truly decentralized group. He mentioned a miner meeting held in Beijing last week, where nearly 90% of the world's computing power, mining pool representatives and Core developers attended. The final result of the discussion was that "most miners support capacity expansion, but it is still opposed by Core developers."

However, due to the dispersion and decentralization of the miners, no mining pool or large miner can play a decisive role in the expansion, making it more difficult to promote expansion. Yang Haipo believes that in contrast to the decentralization of miners, the development of Bitcoin is centralized.

“What I hope more is that each mining pool does not necessarily support BU, but supports the development team and version that each of them thinks is the best, which is conducive to the decentralization of Bitcoin. Bitcoin teams and versions should also have multiple centers.”

When asked about his judgment on the direction of the expansion situation, Yang Haipo said frankly, "What the community is most worried about is division. Fearing division will make people hesitate when expressing their opinions. It is almost impossible to reach a consensus. Therefore, it is difficult to have a certain view on the final result at present."