As Bitcoin completes its fourth halving in April 2024, the mining industry faces renewed challenges with rising operational costs. This article explores the journey of Jihan Wu—once the undisputed king of Bitcoin mining—and the evolution of his company Bitmain, which reshaped global crypto mining.
China's Golden Era in Bitcoin Mining
During its peak, China controlled over 70% of Bitcoin's global hash rate, with Bitmain alone contributing more than 50%. This dominance even raised concerns about potential 51% attacks. However, the Chinese government's 2021 crackdown on mining operations forced mass relocations, reducing China’s onshore hash rate to zero—at least temporarily.
Despite the exodus, Chinese entrepreneurs continued to lead the industry. By 2023, China still accounted for 21% of Bitcoin’s hash power, thanks to off-grid mining operations and proxy-server workarounds in remote regions.
Jihan Wu: The Architect of Mining Power
Early Influence
- Translated Bitcoin’s whitepaper into Chinese, becoming a key evangelist.
- Co-founded Bitmain in 2013, which revolutionized ASIC mining hardware.
- Spearheaded the Bitcoin Cash (BCH) fork in 2017 amid the block-size wars, showcasing China’s industry clout.
Peak Dominance
- By 2018, Bitmain’s self-mining operations controlled >50% of Bitcoin’s hash rate.
- Led China’s mining boom, with local governments tolerating (or tacitly supporting) energy-intensive farms.
The Fall and Reinvention
Government Crackdown
- China’s 2021 mining ban triggered a global hash-rate migration, with the U.S. emerging as the new leader.
- Bitmain’s internal power struggle culminated in Wu’s departure, though he retained assets like Bitdeer (a cloud-mining platform) and Matrixport (a crypto financial service).
Bitdeer’s Nasdaq Triumph
- Focused on overseas markets, Bitdeer went public in 2023, outperforming Bitmain’s stalled IPO plans.
- Today, it operates mines in the U.S., Norway, and Bhutan, leveraging cloud-mining and shared-hashrate models.
Challenges and Innovations
Post-Halving Realities
- Mining costs post-2024 halving: ~$37,856 per BTC (CoinShares).
- Declining relevance of PoW? Ethereum’s shift to PoS and ESG pressures challenge the narrative.
Adapting for Survival
- New revenue streams: Ordinals/BRC-20 tokens boosted miner fees in 2023.
- Cost-cutting: Bitdeer’s in-house ASIC研发 (e.g., TSMC-sourced chips) aims to offset rising difficulty.
Conclusion: The Unyielding Spirit of Mining
From China’s heyday to global decentralization, mining persists—just as Wu evolved from a vocal leader to a low-key strategist. His story mirrors crypto’s resilience: innovate, adapt, or fade away.
FAQs
Q: Why did China ban Bitcoin mining?
A: Officially, due to energy concerns and financial risks. Unofficially, to curb capital outflows and strengthen the yuan.
Q: How do miners survive post-halving?
A: Through efficiency upgrades (e.g., better ASICs), alternative revenue (e.g., transaction fees from BRC-20 tokens), and relocating to cheap-energy regions.
Q: Is PoW mining still profitable?
A: Yes, but margins are thinner. Large-scale operations with access to subsidized energy thrive, while small miners struggle.