Bitmain is tripling the size of its Israeli development center located in Ra’anana, adding 40 programmers, engineers, and marketing experts to the pre-existing team of 15 people. Bitmain’s Israeli development center was established in 2016, and focuses on operating the ConnectBTC mining pool, developing blockchain technology, and artificial intelligence (AI).
The manager of the Bitmain Israeli development center, Gadi Glikberg, says “There has been huge momentum at Bitmain in the past year, arising from growing adoption of blockchain technology in general and digital currencies in particular. The world may be in a period of relative calm after the great hype of December 2017, but for the major companies in the field this is a golden opportunity to plan, build and grow, and Bitmain has identified the potential of Israeli know-how and capabilities to contribute to the company’s global effort”.
Bitmain is headquartered in Hong Kong and is the biggest Bitcoin mining manufacturer in the world, with a valuation of over USD 1 billion. At the current Bitcoin price of USD 7,300, about USD 91,250 of Bitcoin is rewarded per block and there are 52,560 blocks per year, yielding total annual Bitcoin mining revenue of USD 4.8 billion. This estimate doesn’t account for the transaction fees that miners collect, nor does it account for Bitcoin’s price volatility. It is also estimated that Bitcoin miners spend USD 3.5 billion annually on equipment and electricity consumption, yielding profit margins of 20-30% under the current market conditions.
The pool that the Israeli development center oversees, ConnectBTC, holds 0.2% of Bitcoin’s global hash rate, which is approximately 80 PH/s. Bitmain has much larger pools, Antpool and BTC.com, which currently hold 35% of global hash rate and earlier in 2018 approached 50% of the total Bitcoin mining hash rate. There were some concerns that Bitmain’s dominance over Bitcoin’s mining hash rate made the network overly centralized, which may be why Bitmain’s pools have lost some hash rate recently.
Bitmain is expanding into AI with the Sophon project, which is producing AI chips capable of deep learning by integrating massive computing power and a huge amount of data. Bitmain Product Marketer Allen Tang says, “In the future AI will be everywhere. It will be on cars, it will be on cameras, it will be on servers, in the back end. It’s just like the motor vehicle replacing the horse—it’s a big-time change that can dramatically alter the world. We think that’s a big trend and we need to do that.”
AI technology is being developed with application specific integrated circuits (ASICs), the same sort of chips used for Bitcoin mining. The integration of AI with blockchain technology has the potential to create powerful futuristic technology, and it appears Bitmain wants to be on the cutting edge of this.
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