Currently, Crypto mine operator and ASIC mining giant Bitmain was reported to be caught in a downward spiral. As the mining manufacturer undergoes a difficult time, it can lead to several company consequences. Besides, those who are engaged to Bitcoin Cash worries that the fall of Bitmain may cause some trouble.
How Did Bitmain Fell From Grace?
In the previous years, Bitmain has been the leading provider of ASIC mining hardware and massive Bitcoin Cash, Litecoin, bitcoin, and other crypto mning operations. Despite being a extremely secretive company, Bitmain was also known for its ASIC devices’ Antminer series.
In 2013, Jihan Wu and Micree Zhan founded Bitmain. Then, the company rapidly established itself to be a dominating force in the cryptocurrency mining equipment sector.
During the period of late 2017, the mining devices by Bitmain were frequently sold out, which resulted to double or even triple retail price at different reselling sites. However, today, the cryptocurrency asset price remain flat while the mining profitability continue to its all-time low rate.
Now, Antminer devices like the latest S11 are currently sold for only $525. mining bitcoin using Antminer S11 while paying $0.10/kilowatt for power requires almost 6 years or 2,161 days to break even, according to coinwarz.com. Despite that difficulty remain constant, based on today’s number, the result doesn’t sound good for Bitmain devices.
The crypto mining manufacturer could be struggling financially due to allegedly huge investments into BTC Cash. This include investing their mining resources into Bitcoin Cash instead of Bitcoin, and hiring a development staff for supporting the cryptocurrency.
Early in January 2108, each Bitcoin Cash was trading around $2400. Currently, it is trading under $200. Though all crytocurrencies massively dropped since January, BTC Cash tend to suffer a gradual high degree. This suggests that Bitmain’s investment towards Bitcoin Cash seems resulted into a near-total loss.
Does It Trouble Bitcoin Cash?
Following the ousting of Micree Zhan from his position as Bitmain’s Executive Director in October 2019, Jihan Wu planned to revitalize the company and allowed mining equipment bulk purchase with as little as 20% deposit.
During the hard fork of 2017, Wu became instrumental and as advocate to increasing the 1mb transaction capacity of Bitcoin.
Samson Mow of Blockstream claimed that Bitmain sold off a significant amount of BTC to get more Bitcoin Cash two years ago, which speculated to become the reason behind the propping up of BCH price. As the BCH declined against Bitcoin, Wu along with Bitcoin suffered greatly.
So, it’s no surprise why many suspect that the further struggle of Bitmain will result to dumping of BCH holdings. This action will not only drop the BCH price, but also lead to network exposure to hackers.
According to Nathan Reiff, “Further exacerbating the problem of that if Bitmain does decide to dump the remaining BCH it holds, the network will become highly susceptible to a 51% attack in the process.”