The Daily Update - Selling the Dream (or the Nightmare)

Brannan made (although eventually lost) his fortune promoting and equipping the Gold-Rush-Hype, Bloomberg his billions equipping us for the Financial-Information-Age… and more recently Bitmain has made billions dominating a new market selling ‘mining’ equipment to the modern world: everyone from the teen-tech-savvy-crypto-enthusiasts to someone’s grandmother who saw a ‘bit-thingie’ advert in last month’s Reader’s Digest (possibly) as well as inconceivably large institutions mail-ordering a – or a few hundred-thousand – Bitmain mining-rigs.

The company is now estimated to make and control around 80% of the market for crypto-mining-rigs and is valued around $8-12bn, with $2.5bn in revenue last year. This valuation reflects their dominance in the crypto-mining world but would also even put Bitmain in the top 1% of ‘actual’ mining companies by market cap (23 of 2,700 larger than 10bn).

Now, tricenarian billionaire co-founders Jihan Wu and Micree Zhan (who own ~60% of Bitmain Technologies Ltd) are considering an IPO so that more of us can be part of a company that is dedicated to solving some of the world’s most complicated problems… (i.e. Satoshi Nakamoto’s cryptographic hashing algorithms). But whether you’re interested in the valid applications (and possible profits) of blockchain technology or you’re like Charlie Munger – who famously likened the morality of trading bitcoin to “trading freshly harvested baby brains” – This IPO could be a significant step forward for the industry as a whole.

Much craved transparency would necessarily coincide with an IPO, not only into Bitmain’s books, but also the operations of this secretive Chinese company and its influence in the wider crypto-market. This would help reinforce legitimacy (or reveal concerns) for the company and the market, moreover it would provide additional real-time data on the direction and volatility of this potential contagious sector and perhaps help further regulation. Maybe, once all these details come out from the shadows we’ll be able to tell whether all this has been a dream or a nightmare.

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