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 Huxiu Note: This article is reproduced from the WeChat public account "Prism" (ID: lengjing_qqfinance) under Tencent Finance. Author: Liu Peng, editor: Bao Jianguang. In mid-January 2018, it rained continuously for days in Shenzhen, and the temperature dropped below 10°C, signaling the arrival of southern winter. But Huaqiangbei businessman Ding Rui’s mining machine business is in peak season. He has just completed an order for 100 mining machines worth more than 3 million yuan. The person he traded with was a Russian who came from Moscow to pay the deposit. After getting the promise of immediate delivery, he readily paid the deposit. In Huaqiangbei, businessmen like Ding Rui have become a huge group. They have keenly sensed business opportunities in the astonishing rise of digital currencies represented by Bitcoin, Ethereum, etc., and with the help of the production and sales capabilities behind Huaqiangbei, they have spread the mining machine business across the country and even the world. Sweeping by the wave, in just half a year, Huaqiangbei has swept away the decline suffered by e-commerce in recent years. The story of shortage of shops and rising rents has repeated itself. Even the scalpers at the door chatting with you have changed from "invoices and mobile phones" to "mining machines and mining machines." In the process of the crazy growth of digital currencies, the rise and fall of price figures is the focus of most attention. Very few people are willing to seriously understand how mining machines produce digital currencies. But in fact, if there were no developers and producers of mining machines, Bitcoin might still be produced by the laptops of geeks in their spare time. This also means that it will not enter the public's investment horizon, let alone sky-high prices. What even fewer people know is that the mining machine production and distribution chain monopolized by the Chinese is also a typical epitome of "Made in China" leading the world. We met buyers from Serbia, Russia, India and other parts of the world in Huaqiangbei, where they were eager to find the supply of mining machines. But they have no intention of demanding "high quality and low price". This is a seller's market, and Chinese sellers dominate the discourse. Backed by the strong manufacturing infrastructure in Shenzhen and surrounding areas, "Made in China" has firmly monopolized the design and production of various mining machines in the past few years. The world's top three digital currency mining machine manufacturers, Bitmain, Canaan and Yibang Technology, account for more than 90% of the global share - these three companies were all founded by Chinese. In the chip industry, the chip design and development capabilities of mining machine manufacturers have become the fastest-growing segment of the professional chip industry. Top venture capital firms such as Sequoia have also invested in leaders in mining machine production. Now, ambitious mining machine manufacturers have begun to expand into the field of artificial intelligence. They believe that their technological accumulation in the field of computing power can just solve the problem of insufficient computing power of artificial intelligence chips. The story of mining machines is more worthy of Chinese companies’ intensive research than the fluctuating prices of digital currencies. It is most appropriate to start telling the story of the mining machine industry chain from Huaqiangbei, known as "China's No. 1 Electronics Street." Changes in Huaqiangbei: Everyone is discussing mining machines  Entering the landmark SEG Plaza in Huaqiangbei, the word "mining machine" in the floor guide quickly comes into view. The shops on the 4th and 5th floors here are basically occupied by mining machine merchants. Ding Rui was an early merchant here who was engaged in the mining machine business. His original main business was selling graphics cards and chassis. Merchants who previously sold computers and mobile phones have changed their profession and are selling mining machines. Some merchants have not even changed their original signboards, and have mining machines directly on the counter to attract customers. For them, crazy machines are no different from previous computer hardware, but they are just more in demand. The investment manager of SEG Plaza told Prism that after the mining machine business became popular, the rent of shops here has nearly doubled, but it still cannot stop the enthusiasm of merchants. There is a shortage of shops, so they decided to use the Spring Festival holiday to re-plan some shops with unreasonable space and then divide them for rent. “Buy mining rigs from SEG. ”The investment manager was very excited, “Now it has a good reputation internationally! ” During a short visit to SEG Plaza, "Prism" met buyers from Serbia, Russia, India and other places. They are looking for someone who actually has the goods. The most difficult ones to purchase are Antminers and Avalon mining machines made in China. In order to find the right price, they will also skillfully use WeChat to notify the store in time when there is a cheaper price. What merchants in Huaqiangbei like most are these international buyers. Ding Rui’s experience is: “They have clear goals, usually require a relatively large amount, and the visa time is limited, so they will make a decision quickly. ” After the mining machine business started, the sellers also had some new practices. Some merchants have found new ways to provide derivative services to attract customers. For example, in the mining machine hosting business, the merchant finds stable power and space, builds the mine, and the buyer chooses hosting after purchasing the mining machine. After paying the hosting fee, there is no need to consider other issues. In a store with the sign "ASUS Computers", the salesperson tried his best to promote this model and used a calculator to input various numbers skillfully to demonstrate the payback cycle. Within half a year, the original ex-factory price of mining machines was around 10,000 yuan, and the price increased to more than 30,000 yuan, but demand still exceeds supply. “As long as you have the goods, you are the boss. ”One merchant said. In a market with a serious imbalance between supply and demand, second-hand mining machines that have been eliminated by some miners have also become sought after. “Take the Antminer S9, for example. Some mines have stopped working due to various reasons, or they have bought the latest machines and eliminated them. One unit can still be sold for more than 20,000 yuan. ” A mine owner in Sichuan experienced such madness. At the end of 2017, he entrusted a familiar merchant in Huaqiangbei to resell the old mining machine that he replaced at the mine. He said: "The second-hand mobile phone that has been used for a year is actually more expensive than the price I paid for it. ” The first show of Chinese power: the perfect combination of talented young people and Made in China Huaqiangbei has become the largest mining machine sales distribution center in the country and even the world. The support behind Huaqiangbei is the strong electronic industry design and manufacturing capabilities in Shenzhen and nearby areas. Jin Xin, the founder of Mamba Graphics Mining Machine, feels this deeply. He only made up his mind to enter this industry in September 2017. He found all the parts for the production of mining machines in Huaqiangbei, and found a foundry in Baoan, Shenzhen to quickly put into production. This is not possible anywhere else in the world. Jin Xin’s feelings are not unique. Antminer, which holds the largest share of the mining machine market, is also manufactured and assembled in a Shenzhen foundry. The mining machine is then transported to buyers around the world through Shenzhen's location advantages. The "Made in China" power represented by Huaqiangbei and Shenzhen shocked the entire Bitcoin world when it first launched its operations five years ago, and has dominated the mining machine industry chain ever since. In June 2012, an organization called Butterfly Labs claimed to be researching professional integrated circuit (ASIC) mining machines. If the development is successful, Butterfly Lab is likely to control more than 51% of the computing power in the Bitcoin world, which also means that the organization can tamper with Bitcoin blocks and have almost complete control. “The free world of Bitcoin is going to be destroyed! ”The "butterfly" on the other side of the ocean flapped its wings, awakening many domestic Bitcoin enthusiasts. Zhang Nangeng (known as "Pumpkin Zhang" in the currency circle), who is still studying integrated circuit design at Beihang University, and Jiang Xinyu (known as "Roasted Cat" in the currency circle) from the junior class of the University of Science and Technology of China represent China's strength. Pumpkin Zhang is generally considered by the currency circle to be the inventor of the world’s first ASIC mining machine. He named it "Avalon" and sold it around the world, successfully sniping the butterfly laboratory. Compared with Pumpkin Zhang’s “first”, the roasted cat mining machine developed by the talented young man Jiang Xinyu has achieved larger-scale mass production. In July 2012, Jiang Xinyu used the nickname friedcat (meaning "roasted cat") to launch a crowdfunding on the Bitcoin forum bitcointalk. The crowdfunding share was directly transferred to Friedcat mining machine shares and anchored with Bitcoin. Although shares are issued rather than tokens, this process is still regarded by many as the first attempt of ICO (Initial Coin Offering) in China. Wu Jihan, the currency legend who first translated Satoshi Nakamoto’s white paper, invested tens of thousands of yuan. After the successful development of the Roasted Cat mining machine, this investment brought him tens of millions in returns and contributed to his subsequent founding of Bitmain, the world’s largest mining machine manufacturer. In early 2013, the Avalon mining machine and the Roasted Cat mining machine were shipped one after another, while the original challenger Butterfly mining machine was nowhere in sight. In the following years, despite the loss of roasted cats and the rise of new overlords, China has since become the unshakable overlord of the mining machinery industry chain with the help of "Made in China" perfect infrastructure and production capabilities. Prequel to the computing power war: The timing brought by Bitcoin price guarantee But the idealism of playing the savior has also been pushed into the abyss because of this computing power arms race. In 2013, Bitcoin made its debut in front of the world. During the year, the price increased more than 100 times, reaching a maximum price of 8,000 yuan. Early adopters were surprised to find that professional-grade mining machines, like chickens that can lay golden eggs, can continuously bring huge wealth. The prices of Avalon mining machines and Roast Cat mining machines have been speculated to six figures in the market, and demand still exceeds supply. The profit makers who have tasted the sweetness never want to go back to the past. The balance originally designed by Satoshi Nakamoto for everyone to use a laptop to participate in mining and obtain Bitcoin rewards was completely broken. ASIC professional mining machines designed in China and made in China have staged one computing power arms race after another in the Bitcoin world, raising the threshold of "mining" tens of millions of times. Ordinary computers have become history, and integrated circuit mining machines priced at tens of thousands of yuan have been brought to the stage. As more and more mining machine manufacturers join in, in the crazy computing power arms race, the difficulty of Bitcoins obtained by each mining machine increases. Whoever can develop a machine with stronger computing power will receive a large number of orders. Under Moore's Law, chip upgrade R&D capabilities directly determine the success or failure of the competition. Liao Xiang, CEO of Lightning Intelligence, personally experienced and participated in this arms race that year. He told "Prism" that in the turbulent era of the industry, traditional chip manufacturers, such as Intel, AMD, Nvidia, etc., simply looked down on this business, while the second and third echelon chip manufacturers had no time to take care of it. “It can be said that traditional chip manufacturers have not intervened for various reasons, giving the industry a large window period. Whoever can develop the latest chips and put them into production will win. ”Liao Xiang said. Wu Jihan, an early investor in Roast Cat, became the biggest winner in this round of arms race. He co-founded Bitmain in 2013 with Ketuan Zhan, a chip expert he met by chance on the street. The latter developed the ASIC chip in half a year and launched this mining machine called "Antminer S1" to the market in November 2013. “The rise of Bitmain can be said to be due to the right time, right place, right people, and everything is indispensable. ”Comments from people who also experienced that computing power arms race. First of all, the combination of the two founders was a "golden partner" in the mining machine entrepreneurial circle at that time, because "Wu Jihan understands Bitcoin and Zhan Ketuan understands chips." In these turbulent times in the industry, such a combination is particularly precious. In addition, there is the "luck" component. The Antminer S1 was launched just when the price of Bitcoin was soaring the most. This provided Bitmain with sufficient food and grass to support the research and development of next-generation chips when the currency price hit a trough in 2014. “In the world of martial arts, nothing can be broken except fast. If the ASIC chip developed by Ketuan Zhan was delayed another month and the price of Bitcoin dropped from 8,000 to 800, there might not be a future. ” In the fierce competition, limited by the computing power that the chip can carry, the mining machines produced by many entrants face the risk of being eliminated before they leave the factory. The Roast Cat Mining Machine, which once accounted for most of the computing power of the entire network, has also begun to lag behind. At the end of 2013, at a critical moment when the price of Bitcoin was soaring, Roast Cat's second-generation chip research and development encountered setbacks. Just like the ending of the enemy "Butterfly Laboratory" that it and Avalon defeated together, at a node where computing power is rapidly expanding, every step is slow and every step is slow. Under the competition from other rivals, the computing power of the Roast Cat Mining Machine, which occupied more than 20% of the entire network at its peak, quickly dropped to 4%. After more than a year of hard work, Roast Cat mysteriously disappeared on his way to inspect the production line, and it remains a mystery to this day. Shortcomings of artificial intelligence: Will the computing power bottleneck be broken by mining machine manufacturers? Today, four years later, Bitmain, the winner of the computing power arms race, has become the unquestioned king of the Bitcoin world. In the global ASIC mining machine market share, Bitmain has an absolute say with more than 70%. In the world's top chip foundry TSMC's first batch of customers for the most advanced 7-nanometer process in 2018, Bitmain is impressively juxtaposed with well-known manufacturers such as Qualcomm, Huida, AMD, and HiSilicon. In a new round of financing in 2017, Bitmain attracted Sequoia and IDG to enter the market, with a valuation reaching billions of dollars. Pumpkin Zhang, who developed the world's first ASIC mining machine, is no less impressive. The company he leads, Canaan Ventures, submitted an application to be listed on the New OTC Market after its backdoor takeover of A-share company Lu Yitong failed, and was valued at RMB 3.3 billion in a new round of financing. Data obtained by "Prism" shows that benefiting from the astonishing increase in Bitcoin prices in 2017, Canaan's revenue exceeded 2 billion yuan in 2017, most of which came from the sale of mining machines. Corresponding to this number is a R&D team of only 30 people. After monopolizing the global mining machine market share, the two companies have discovered new excitement: with the help of the computing power technology accumulation of Bitcoin mining machines, they can copy their experience to the forefront of world technology-the field of artificial intelligence. A person from Canaan Intelligence said that among the elements for realizing artificial intelligence, algorithms are generally the most valued part, but computing power has always been ignored. In terms of algorithms, chip manufacturers AMD and Nvidia are at the forefront of deep learning through the graphics cards (GPUs) they design and produce. However, after years of accumulation and development, the algorithm has become very mature, and the computing power factor has become the biggest shortcoming restricting artificial intelligence. “Why can’t some artificial intelligence robots walk upright? The fundamental reason lies in computing power. ” the person said. At the chip level, Bitmain Product Strategy Director Tang Weiwei predicts that Bitcoin mining machine chips have gone through the process from CPU to GPU to ASIC dedicated chips. Similarly, artificial intelligence chips will also repeat the process from CPU to GPU to ASIC. “Graphics processors represented by GPUs drove the first wave of artificial intelligence... However, with the development of the industry, the maturity of deep learning algorithms, and the rapid evolution of system architecture, the number of dedicated chips (i.e. ASICs) will exceed GPU chips by 2020. ” Tang Weiwei is determined. Bitmain released its artificial intelligence-based chip brand "Suanfeng" in January 2018, and Canaan's related actions are also in full swing. “This is an opportunity for China to get closer to or even surpass the United States in the field of chips. ”At the launch ceremony of Bitmain’s “Suanfeng”, Wang Jun, its director in charge of AI product technology, said excitedly. But this time, the two companies are facing opponents with quite a strong lineup. Top players such as Google, AMD, and Nvidia cannot be underestimated in terms of R&D financial support or accumulation of technology and data. A senior observer in the field of artificial intelligence pointed out that because the algorithm for artificial intelligence training may change, and the training data and ecology are not in his own hands, he expressed concerns about the future. But he also saw the positive side. The two companies chose the ASIC direction with the most experience and advantages, which was the power bred in the blockchain ecosystem and launched an impact on traditional chip manufacturers. Those foundries in Shenzhen and merchants in Huaqiangbei should be looking forward to the market exploding as soon as possible. When "Made in China" products dominated by technology such as mining machines become popular, no one will miss the era of "copycat machines" where price wars were fought every day. *The article is the independent opinion of the author and does not represent the position of Huxiu.com Guess you like North Korea’s Bitcoin Shura Field Talking about blockchain is not just about robbing users. Jen-Hsun Huang: What Nvidia wants to do cannot be done without love
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