China: Bitcoin mining operator gets investment boost from Sequoia, IDG Capital
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China: Bitcoin mining operator gets investment boost from Sequoia, IDG Capital

BITMAIN TECHNOLOGIES LTD., the Beijing-based bitcoin mining organization, has scored a triumphant investment from storied venture capital firm Sequia Capital and local equity firm IDG Capital.

According to Bloomberg sources, Bitmain has raised US$50 million thus far as it looks to continue expanding its operations. Sequioa and other firms involved in the fundraising round will be providing management advice.

Bitcoin mining, which lies at the heart of the entire bitcoin economy, is an expensive venture, requiring constant system upgrades in order to keep up with increasingly complex computer systems. Miners are integral parts of the bitcoin economy as they work to approve transactions by crunching algorithms and solving problems. In return, miners get paid in bitcoin which can be exchanged for real world cash.

SEE ALSO: Peach Aviation becomes Japan’s first airline to accept payments in bitcoin

As bitcoin and cryptocurrencies have become ever more popular, the valuation of the entire market has shot up, benefiting companies such as Bitmain. The bitcoin market is now estimated to be worth US$75 billion.

Bitmain produces chips and machines for others looking to set up bitcoin mining operations, though it owns its own outfit which has skyrocketed in value, leading to possible opportunities to list. Bitmain has told Bloomberg it is planning on producing chips for running artificial intelligence programs, as well as a US-based mining facility.

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Bitcoin is slowly being accepted by more traders and vendors. Source: Reuters

Bitmain and its founders have been central players in the drama that played out over the last three months around the bitcoin currency. Factions within the cryptocurrency scene had been squabbling about the purpose of cryptocurrency, resulting in the split in the community that took place in August. Today, what was formerly known as bitcoin has become two differing systems – the original bitcoin and a splinter faction called bitcoin cash.

SEE ALSO: Bitcoin Cash: Fate and future of the new cryptocurrency

During internal fights, Bitmain co-founder Wu Jihan was a vocal proponent of expanding blockchain network sizes beyond its 1-megabyte cap, a limitation which was enforced to ensure fast transactions. However, critics have pointed out that doing so would further empower miners, which could have an adverse effect on regular consumers.

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