Bitmain changes miners’ sales tactics, betting heavily on the Bitcoin halving bomb


The Bitcoin mining colossus Bitmain has modified its sales strategy to reverse a decline in market share following the return of co-founder Jihan Wu at the helm of the company.

At a customer event organized by Bitmain on Saturday in Chengdu, China, Wu appeared on stage for the first time as the only president and CEO a month after regaining control. Addressing customers and partners, he presented new strategies to restore the waning domain of the Bitmain market.

In essence, he proposed influencing miners to keep Bitmain products by having the company assume the risks related to cash flow, the volatility of bitcoin prices and electricity costs.

As such, Bitmain is betting strongly and that the price of bitcoin will rise next year amid the scheduled reduction of mining rewards, which will reduce the new offer created with each block of transactions. If the next halving will really cause a rally like the first two did, it is currently a matter of debate.

While the event was exclusive to customers, the screenshots of the company’s presentation deck seen and verified by CoinDesk show that Bitmain has launched three main tactics to attract mining investors.

To begin with, it seems that Bitmain has replaced its previous sales strategy, because customers had to pay the total amount in advance for the mining equipment, for a future shipment, a phased payment structure will now be made.

For example, customers who pre-order between 100 and 999 miners can reduce 50 percent, while larger investors who buy more than 5,000 units can pay a minimum of 20 percent in advance.

The rest of the payments must be settled seven days before the actual shipping date. But the result is that this would shift the pressure of the short-term cash flow from customers to Bitmain.

Co-mining

A second tactic that Bitmain plans to launch is aimed at those who own mining farms with energy resources but do not yet have enough equipment to operate at full capacity.

The company said it will offer a co-mining agreement that lasts more than a year for mining farm operators to rent their flagship products AntMiner S17 or T17. Bitmain would cover the cost of electricity throughout the year at 0.35 yuan ($ 0.05) per kilowatt hour, while mining farm operators remain responsible for maintenance

In return, Bitmain will retain 75 percent of the mining profits and the mine operators will take the remaining 25 percent. Notably, if mining revenues are less than the cost of electricity, all the coins extracted would go to Bitmain, as shown in the presentation.

Through this plan, Bitmain could once again increase its mining capacity for itself, an investment that has declined over the past two years as the company focused more on selling equipment.

CoinDesk reported earlier this year that Bitmain reduced its bitcoin hash power from its property to only 237 peta hash per second (PH / s) in May, a drop of 88 percent since April, which represents about 0.5 percent of the total power of the network.

However, according to the company’s latest disclosure, its patented mining power has recovered in the last six months at 930 PH / s as of December 5, taking approximately one percent of the total network hash rate .

In addition, Bitmain now seeks to alleviate the concerns of mining investors regarding the volatility of bitcoin prices by offering a sale option to those who order large quantities of products.

For example, for users who buy 1,000 units of AntMiner S17 Pro, with a value of approximately $ 1.5 million, the company will give away 62 sales options, with a total value of one percent of the amount of the miner’s order. Each sale option would allow customers to sell bitcoins at a price of 35,000 yuan ($ 5,000) on March 27.

If the price of bitcoin exceeds $ 5,000 for that date, it would be a losing proposal to exercise the option. If it is below the threshold, customers could exercise the option of making a profit, the size of which depends on how much lower the price of bitcoin would be below $ 5,000 at that time. Bitmain would be the counterpart with the cost.

Heated competition

It remains to be seen if the new Bitmain strategies will succeed. But the change is a sign of the intensification of competition in the mining business.

At a recent meeting of all employees, Wu admitted to his staff that Bitmain’s market dominance in mining equipment and the mining group’s hash rate have been declining throughout the year.

And it was for that reason that he decided to return to the administration of the company making a surprising move that overthrew his co-founder Micree Zhan as president.

Meanwhile, competition among the leading mining manufacturers in China continues to run non-stop before halving or halving Bitcoin next year with the WhatsMiner manufacturer based in Shenzhen MicroBT that launches its M30 series of miners.

Also on Saturday, MicroBT launched the new product line. They have a hash power of 88 tera hash per second with an energy consumption as low as 38 joules per terahash.

Canaan, the second largest producer of miners in the world, recently completed an initial public offering on the NASDAQ, with $ 90 million of new capital.

The producers of mining equipment with greater efficiency in computing power and energy saving, have to innovate so as not to be left out in the blockchain-bitcoin business, a brave fight is expected. It is expected by new announcements.

Reference: coindesk.com

Disclaimer: This press release is for informational purposes information does not constitute investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent the views of infocoin, and should not be attributed to, Infocoin.

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