A Hong Kong-based investment company is ramping up an ASIC mining hardware business that will drop four Petahashes (PH/s) of computing power onto the network by the end of March.
Massive Luck Investments, domiciled in Hong Kong but registered in the British Virgin Islands, has taken a 50% stake in Swiss mining hardware manufacturer Bitmine, (formerly Exion Networks), which has been designing Avalon-based mining hardware. The new venture spans ASIC hardware sales to individual customers, hosted mining, and its own private mining pool.
Massive Luck Investments, which has offices in places including Manila and the UK, is a relatively new entrant to the bitcoin space. The firm, which also has operations in traditional gold and copper mining and rare earth metals, decided to get into digital mining after evaluating new market opportunities earlier this year. With Bitmine, it is buying existing ASICs from other manufacturers while also preparing to fabricate its own through a partnership with fabrication giant Global Foundries.
A senior spokesperson for Massive Luck, who asked not to be named, said:
“We had a board meeting which put together a small research group, tasked with making an initial assessment of business opportunities in the fledgling digital currency area. The team presented its report in early January, and the report identified the digital currencies as a potential area of disruptive technological breakthroughs, and a very promising investment opportunity."
In February, Massive Luck decided to pursue digital currency as an opportunity in three areas: mining hardware, gaming, and the integration of digital currencies and traditional financial infrastructure. It has already started its bitcoin gaming operation, BetCoin ™ Dice, separately to its Bitmine venture. It hopes to steal significant market share from Satoshi Dice with the gaming operation.
The Bitmine ASIC mining hardware venture is pursuing three broad areas: retail equipment sales, hosted mining, and a private multi-Petahash mining operation. It will progress through three generations of ASIC chips in relatively rapid succession, starting with Avalon chips.
The Avalon OEM community has been a small but frustrated one. BitSynCom, the company behind the 110nm chip, has been promising supplies for months, with significant delays. However, last week, it said it is now shipping 40,000 each day. Tens of thousands went to a Swiss party who organized a group purchase. Bitmine CEO Giorgio Massarotto drove picked up between 37,500 and 40,000 chips over the weekend – that equates to around 16TH/sec of capacity.
This is just the first in three generations of chips that Bitmine will use, however. The second generation of ASICs on its timeline come from BitFury. They are built to a 55nm process and selling for $20 per GH/sec, and are designed using a process called fully depleted silicon on insulator (FDSOI). These chips will provide 2.5-3GH/sec per chip at 0.5-0.75W/GH. It will put 16 on a board.
“We plan to deploy it in four different configurations: 5, 10, 20, and 40 cards per unit, or roughly 250, 500, 1,000, and 2,000 GH/sec,” said the Massive Lucky exec.
The third generation ASIC, labeled CoinCraft, will be a 28nm in-house effort. It has been co-designed by a number of players, including Synapse, Innosilicon, and Verisilicon. The chip is built to scale with bitcoin network difficulty, by operating in three modes.
"When the difficulty level is relatively low (the first 4-5 months of the life cycle) it can be set to TURBO mode, mining at 40GH/chip, 0.75W/GH,” said the spokesperson. "As the difficulty increases, it can be adjusted to the REGULAR mode, mining at 30GH/chip, 0.5W/GH.” Finally, as difficulty scales, the chip can throttle back to a 20Gh ultra-low power mode at 0.35w/chip.
This chip will cost $6.8/GH in fully assembled boxes, which like the Avalon and Bitfury boxes will be available directly to end-users. Bitmine will take delivery of 100,000 of these chips from Global Foundry in November, giving it 4 Petahashes of power (not including the BitFury chips).
It expects to ship 1-1.5 Petahashes of power to customers who want to run the boxes themselves. However, this is really a chip for the cloud, as it enables the firm to dynamically adjust power consumption in a large-scale computing operation, and that’s where the other 2.5-3 Petahashes of power is going.
That's where the Asian datacenter and a $14m, 1.8 Megawatt supercomputer comes in.
Massive Luck Investments and Bitmine are jointly building a data center in China that will host mining power using the third-generation chips. That facility, which will cost just under $1 million for basic physical construction, will be finished around February, although it will start hosting CoinCraft processors in small quantities in December.
Massive Luck may mobilize the entire 5,000 workforce of one of its companies, Cutting Edge, to work in three shifts around the clock to assemble all mining units within a week or so in January. Around 0.5 Petahashes of CoinCraft computing power will be hosted for customer use.
The supercomputer comes later. Actually, there are two of them, built under an agreement with the Shanghai Supercomputer Center. One of them, to be delivered in Q4 2014, will cost $12m to build, and will offer CPU power designed for data modeling tasks (the normal things that academics do with supercomputers). Massive Luck Investments gets "certain subsidies and exemptions" in return for its help, because the Chinese government badly needs supercomputing power.
“The Chinese government provides preferential policies to attract FDI [foreign direct investment] in certain high tech areas that benefit the Chinese economy,” said the Massive Luck exec. “They require traditional CPU-based traditional computing power to address the acute shortage of it. Shanghai supercomputer center will be responsible for the overall facility design and staff training."
However, the other supercomputer is scheduled for installation in March at the Bitmine/Massive Luck data center, and it’s where the firm’s 2PH of remaining ASIC hash power will go. This will cost $14m including the cost of the building, and the materials and labour for installing the equipment in the datacenter. However, the spokesperson says that Massive Luck owns and controls all of that power, promising that the Chinese government won't be able to begin manipulating the market with it.
It isn’t clear whether the firm will fabricate more CoinCraft chips after this. A lot depends on market variables such as bitcoin pricing and what other ASIC vendors are doing.
“We're following the CoinTerra developments very closely,” said the Massive Luck insider. “This is a dark horse, so a lot will depend on what they deliver.”
In the meantime, the 800,000 Avalon chips due to hit the market in the next few months are only the start, as mining becomes an increasingly cloud-based venture. Get ready to watch those difficulty charts spike even more this fall.
Image credit: bitmine.ch