Bitmain’s ASIC dominance has continued, with Bitmain-based mining pools collectively accounting for nearly 50% of all Bitcoin mining power.

Two prominent Bitcoin mining pools, BTC.com and Antpool, contain 27% and 15.3% of Bitcoin’s hashrate respectively. Bitmain surprisingly owns and manages both pools, allowing the mining superpower to oversee over 42% of Bitcoin’s hashrate. Critics of Bitmain have begun to worry that Bitmain could abuse this substantial level of influence, giving criticisms along the lines of: “This much power should not be held in the ‘hand’ of one company.”

When miners allocate their hash power to a mining pool, they essentially give the pool operators the authority to use the hashrate however they see fit.

As Bitmain nears the monumental 51% level of influence over Bitcoin’s hashrate, some have begun to fear that a hacker would be able to take control of the hashrate under Bitmain’s jurisdiction.

51% control of a POW blockchain, like Bitcoin, would hypothetically allow for an ill-natured actor to double-spend transactions. With double-spent transactions essentially allowing the hacker, or group of hackers, to temporarily multiply the value of their cryptocurrency holdings.

Bitmain’s seemingly unfailing market dominance may continue, as China Money Network reported that Bitmain raised over $400 Million U.S. in a pre-IPO funding round.

Sequoia Capital’s China branch, a venture capitalist firm who has influence over important industry kingpins, reportedly led the pre-IPO funding round for the influential cryptocurrency mining business.

Bitmain, now a part of Sequoia’s circle of influence, was reportedly valued at $12 billion by the venture capitalist firm. Bitmain’s CEO, Jihan Wu, has continually mentioned a possible initial public offering (IPO), with Chinese media stating that Bitmain will apply for an official IPO in Hong Kong.

Chinese media mentioned that Bitmain plans to enter the public market with a valuation of over $30 Billion, with trading commencing by the end of the year at the latest. Speculation runs high, as users scramble to postulate where Bitmain would allocate over $30 billion in public funding to. It is more than likely that the ASIC giant will continue to develop stronger ASICs, bringing more POW algorithms to their knees.

This IPO announcement came after Canaan Creative, one of Bitmain’s most prominent competitors, filed an application to hold a similar IPO in Hong Kong, with a smaller valuation of around $2 Billion.

Canaan, known for the Avalon ASIC lineup, may finally be able to encroach on the market share which Bitmain has carved out for itself. Canaan is expected to put the public funding to good use, possibly developing stronger ASICs that put pressure on the near-monopoly Bitmain has created.

Hope for Canaan’s success is at all-time highs, as Bitmain’s business practices have become the topic of criticism within the cryptocurrency community. Bitmain is frequently blamed for the centralization of certain blockchains, along with dubious business practices Bitmain reportedly utilizes.

Some accuse Bitmain of setting up ‘secret ASIC’ farms, mining with unreleased ASIC technologies to damage the profits of GPU miners, and then selling the used ASICs to unsuspecting consumers. Although this has not been directly confirmed by Bitmain, users have extrapolated data from blockchain information to bring some sort of credence to these rumors.

As mentioned before, many hope for Canaan’s success, as it has become apparent that strong competition breeds better market conditions for all participants. 

The post Bitmain Raises $400 Million Prior to its $12 Billion ICO, Growing Dominance appeared first on NewsBTC.

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