Twitter theorizes Bitmain is insolvent, desperate to stay afloat

11 Mar, 2019 | Updated: 11 Mar, 2019
by Richard Allen
Twitter theorizes Bitmain is insolvent, desperate to stay afloat

Rumors have begun circulating on Twitter that, despite its best efforts, Bitmain is drowning in debt and has begun liquidating large sums of its crypto reserves in an attempt to stay afloat.

Samson Mow, Chief Security Officer at Blockstream and chief executive of Pixelmatic, explained in a series of tweets how Bitmain is struggling.

According to AMBCrypto, Beijing Bit Continental Technology and Shenzhen Yuxin Technologies are two of the companies that have filed lawsuits against Bitmain. Additionally, Bitmain was hit with a class action lawsuit at the end of last year after a Bitcoin miner accused the company of cryptojacking customers through their ASIC devices.

Read more: Bitmain is sued for cryptojacking customers using their own ASIC devices

As Mow goes on to explain, Bitmain’s S15 miners are another issue the company faces. According to Mow, Bitmain has been selling the S15s at a loss (about 30% below cost). In response, Blockstream CEO Adam Back added:

Mow further states that Bitmain has been “cherry picking” good S15 chips from a total of only about 1000 that were made to demonstrate the miners to potential investors. “It’s all a magic show,” Mow says “because their actual yields are so bad that mass production would never be economical.”  

Additionally, sources at Taiwan Semiconductor Manufacturing Company (TSMC), a company that provides Bitmain with mining chips, have said that they have no 7nm capacity available for Bitmain’s miners as they’ve all been sold to Apple, Qualcomm, Huawei, Nvidia, AMD and others.

All in all, the information Mow has provided doesn’t paint a pretty picture and the crypto community doesn’t seem too phased.

Read more: An insider with Bitmain says its crypto holdings are down over 90%

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