A Sit-Down With Billionaire Bitcoin Mining Mogul Jihan Wu of Bitmain
Sitting down with Jihan Wu, one gets the sense that the crypto-tycoon might be more at home in a college AV club than in the ranks of the world’s youngest, richest businesspeople.
The 32-year-old cofounder and co-CEO of Bitmain, the world’s biggest cryptocurrency mining firm, displays a strikingly reserved and gawky demeanor. At the start of an interview in Manhattan in mid-May, when posed with the opening question “What’s up?”, Wu merely remains silent. After a second prodding, he replies, “Um.”
Several seconds later, the conversation starts. Despite Beijing-based Bitmain being only five years old, the privately-held company brought in $2.5 billion in revenue last year, Wu says, largely through sales of specialized, cryptocurrency-mining, computer chip hardware. It also takes a cut of the funds generated via its market-dominating cryptocurrency mining pools, BTC.com and AntPool. In its short life span, Bitmain has ballooned to a private market valuation of $12 billion, he says (although Bloomberg estimates the firm’s worth as closer to $9 billion, with Wu and his cofounder and co-CEO, Micree Zhan, jointly owning about 60% of the business).
Wu is on a mission not only to maintain Bitmain’s throne, but to pad it. He has designs on diversifying the firm’s dominance with an entrée into the booming field of AI; he says the company plans to release an AI chip product as early as later this year. Wu also seeks to persuade regulators to ease up on their cryptocurrency policies. (Nowhere are regulators stricter than in China, Bitmain’s home, where the government has severely limited the operations of online cryptocurrency exchanges and has banned initial coin offerings altogether.)
“We see in the future that negotiating and working with regulators is quite important,” Wu tells Fortune. “We need to push those heavy regulations back a little bit. But we need to work with them, not just try to get around it.”
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The cryptocurrency billionaire also addressed some of the controversy and conspiracy theories that have swirled around Bitmain. Below is a partial excerpt of Fortune’s interview lightly edited for brevity and clarity. (Read the rest of the interview here.)
Fortune Ledger: Why did decide to put all of your money into Bitcoin when you heard about it in 2011? What made you take that leap?
Jihan Wu: I very quickly grabbed the idea, apprehended it, and thought it would work. Money is not a binary thing—money, or not. It’s more like a scale from zero to one. Something is more like money than other things. That’s the first thing we need to know.
So when Bitcoin was invented, it only mattered how many people recognized Bitcoin as money. Two years since it was invented, there were already thousands of registered users on forums like btctalk.org. They came from every corner of the world—German, Russian, American, Chinese, and other countries. Without the Internet, forget the idea because you can find no support—no companions. But with the Internet, people can live very far from each other, and you can find other people who accept the same idea and form consensus and an economy on the Internet. I think that’s a very fundamental catalyst for Bitcoin’s success.
Do you ever mine cryptocurrency internally before you release a new miner onto the market?
No, we don’t do that. As in, sell a second-handed mining rig? If we sell a second-handed mining rig, we would be transparent that this is second-handed. We don’t do mining first and then make the mining rigs old and then sell them as if they’re new. If it was second-handed, we would tell the customer it’s second-handed.
It’s against our principles inside our company to do such things. This is absolutely bad rumors about us. From day one, we are transparent. We have ways to sell used rigs on the market. We don’t have to pretend that some mining rigs are unused ones.
Not even used—I mean, would you ever, before you release a new miner, have a few months where you have an effective monopoly on that hardware, because it hasn’t been released publicly yet?
No, it never happened. We have a small-scale test. We don’t do that. That is not our strategy.
I ask because there have been reports and rumors.
I read those stories as well. There’s some kind of group of people that controlled the majority of the hash rate of Monero for a long time. I would like to say that to develop such a kind of ASIC [specialized computer chip] is not a kind of secret skill that only Bitmain has. Lots of people can do that. For large companies like Bitmain, and especially myself, I do not even have the time, attention or resources to have such a kind of plan to do this. If we develop hardware, we just release and sell it on the market. Right after we have sample machines working, we start sales to market. We don’t have such kinds of advantages.
What are your priorities over the next few years?
My priority is, first, that we will continue to invest a lot of resources into the research and R&D of mining rigs to make sure we maintain an advantage over other competitors, like Avalon. We will also invest into our vision about the future of a crypto market. We think that it will start to support the real world economy, and to build more than this financial market on the Internet. Bitmain will also start to deploy lots of artificial intelligence products into the market—a totally new business selling hardware to do artificial intelligence accelerations.
What will that look like?
It’s quite like Google’s TPU [Tensor Processing Units]. It’s just hardware.
When will that be out?
Maybe by the end of this year.
Do you speak much with regulators?
Not that much. Just sometimes, in conferences, we meet with some of them. Our business is semiconductor design. Circle [a U.S. cryptocurrency startup privately valued at $3 billion after Bitmain led it’s most recent financing round] has been much more experienced with regulators. That’s why Bitmain is interested in Circle as well. We see in the future that negotiating and working with regulators is quite important. We need to push those heavy regulations back a little bit. But we need to work with them, not just try to get around it.
What do you think the Chinese regulatory regime is going to look like in a few years? What do you predict to happen?
I’d rather not give any comment on the regulatory policies of the Chinese. It’s too sensitive.