Chinese language on-line lottery firm 500.com (NYSE: WBAI) has acquired Bee Computing, a Hong Kong-registered maker of Bitcoin mining machines, for $100 million, in accordance with an filing Monday with the U.S. Securities and Change Fee.
500.com, which changed its identify to BIT Mining Restricted in March, has been quietly shifting its focus from its struggling on-line lottery enterprise to bitcoin mining over the past 4 years. The corporate accelerated that transition late final 12 months amid bitcoin’s historic bull run, making it considered one of many publicly traded corporations making an attempt to revenue for bitcoin’s rising value.
It’s now one of many few large-scale corporations within the crypto-mining enterprise after buying the third-largest mining pool, BTC.com, and three mining farms below its Loto Interactive unit. The corporate is venturing into the enterprise of creating mining machines with the newest deal, which comes at a time when mining corporations are briefly provide of these machines.
BIT Mining mentioned Bee Computing has labored with MTK, which is the biggest chip designer in Asia, to make a seven-nanometer chip for bitcoin mining. Taiwan Semiconductor Manufacturing Co. (TSMC) will provide the chips, in accordance with Yufei Jiang, CEO of Bee Computing.
Jiang mentioned Bee Computing has obtained backing from a number of the most influential corporations within the semiconductor trade. MTK invested $9.5 million in a Collection B spherical, and Taiwan-based ASE Group, which is the main semiconductor meeting and take a look at firm, invested $3 million in the identical spherical.
Bee Computing’s present miner mannequin’s efficiency is much like Bitmain’s T17, which tends to have greater vitality consumption than Bitmain’s S17 however is much less highly effective than Bitmain’s newest mannequin S19.
Jiang mentioned Bee Computing’s analysis and improvement slowed down throughout the bear market a couple of years in the past however the firm can decide up the tempo with new capital from BIT Mining.
BIT Mining is about to speculate $30 million in Bee Computing’s analysis to develop higher 7-nm chips for bitcoin mining and better high quality miners for ether and bitcoin mining. Jiang mentioned the corporate would be capable of take a look at new chips by October.
Crypto miners use the application-specific built-in circuit (ASIC), which is an integrated circuit chip, to mine cryptocurrencies similar to bitcoin. The 7-nm determine refers back to the measurement of the transistor. The smaller the part is, the extra you’ll be able to match into a bit of silicon and the extra highly effective the mining machine turns into, making the chip some of the sought-after elements for any main bitcoin miner maker.
To place that into context, main crypto mining machine maker Bitmain’s newest mannequin makes use of 7-nm chips. Designing steady and high-performance chips for mining machines may be very pricey and difficult even for some massive gamers within the semiconductor trade, in accordance with Jiang.
Whereas Bitmain is finding out new fashions that use 5-nm chips, it might show to be troublesome to fabricate these as a result of TSMC would make a lot of the chips for automobile makers or cellphone corporations similar to Apple.
Bee Computing produces a lot much less yearly than Bitmain does, due to the mounted variety of 7-nm chips TSMC allocates to every maker of mining equipement. Within the close to future, Bee Computing plans to offer all the brand new mining machines to BIT Mining till it has a surplus to promote.
BIT Mining had disclosed that it bought $8.5 million price of mining machines in February from Bee Computing.
Based on the acquisition settlement, BIT Mining pays Bee Computing $35 million in inventory by the tip of the second quarter this 12 months and ship the opposite $65 million price of inventory after the acquired firm manages to provide a sure variety of 7nm ASIC bitcoin mining machines in addition to make greater efficiency bitcoin, ethereum and litecoin mining machines.
BIT Mining formally announced its strategic shift to bitcoin mining in December. In February, the corporate bought the crypto mining mining pool enterprise, BTC.com, from Bitdeer Applied sciences, which was majority owned by Bitmain’s former chief govt Jihan Wu. It has bought no less than $14 million in mining machines in an all-equity deal.
Mixed with the present mining pool providers offered by BIT Mining’s subsidiary Loto Interactive, the corporate could be one of many largest mining swimming pools on the planet, in accordance with information from BTC.com.
Loto Interactive has three massive information facilities within the crypto mining hub Sichuan province in central China due to Sichuan’s wealthy hydropower in the summertime. Loto Interactive beforehand solely offered venues and upkeep providers, reasonably than shopping for mining machines and benefiting from mining cryptocurrencies. The corporate has began working its personal miners early this 12 months.
If an organization solely operates a mining website for miners to make a revenue, it doesn’t have a lot publicity to crypto’s costs, It will face extra price-related dangers and will stand to revenue extra if it begins to purchase mining machines and run them in its personal mining websites.
Tsinghua Unigroup is BIT Mining’s holding shareholder, however it stays unclear how the Chinese language semiconductor conglomerate is concerned within the firm’s companies.