Soon after, the Bitcoin price tumbled and put a lot of companies out of business. And when it comes to computer hardware production, economies of scale often form.
This means that the bigger the company and more powerful their hardware, the faster the company can grow and improve. This head-start in quality and popularity gave Bitmain the boost to end up on top of the ASIC game, already achieving success on the scale of giants like NVidia.
An ASIC is a type of computer that is designed to do only one job. It also exposes a significant amount of the Bitcoin network to any bugs or security issues with the Bitmain hardware. Antbleeding Out Antbleed is a vulnerability in the Antminer software that allowed Bitmain secret access to shut the devices down remotely. This backdoor was revealed in April, and the massive portion of miners using Bitmain technology made the issue especially concerning.
If exercised, Bitmain could theoretically shut down vast amount of the miners on the network and keep their miners running.
This would allow them to effectively take over the Bitcoin network entirely, controlling the production of every block. Mining pools are networks of computers working together to mine for cryptocurrencies, sharing the rewards in proportion to each miners contribution.
Both are owned by Bitmain, though how much of the computing power is their hardware as opposed to others contributing their devices is unknown.
These rented miners are maintained and operated by Bitmain on behalf of the renters and mine as part of Antpool. While Bitmain may not directly own nearly half the network, they do control an oversized amount of influence over the voting activity of their own pools and other pools.
This influence empowers Bitmain to attempt to control the direction of the Bitcoin protocol development.
Segregated Witness SegWit was a controversial Bitcoin protocol change aimed at scaling the network. However, SegWit and AsicBoost are not compatible. Bitmain had been working on AsicBoost technology for some time, and there were those who believed the extra efficiency would make their already healthy share of the network even healthier, giving them more control.
Bitmain was also a vocal opponent of SegWit, and accordingly their mining nodes and pools were set to reject the protocol upgrade. Many in the community came out against Bitmain, accusing them of preventing SegWit in order to make more money using AsicBoost. Bitmain defended themselves from these allegations in a blog post. The real reason for their rejections of SegWit as founder Jhan Wu told Bitcoin magazine was to force a proposal they WERE a fan of, namely increasing the size of blocks via a fork called Bitcoin Unlimited.
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Artificial Intelligence Hardware With mining fully in hand, Bitmain is looking toward the future and their next innovation.