BitFury has been on a roll this year with over $40 million in venture capital funding, as well as the addition of Jonathan Teo and Dr. Jackson Hu to their Strategic Advisory Board. To top it all off they added President and Chief Strategy Officer for Samsung Electronics Young Sohn to their Advisory Board. BitFury has emphasized that they are not a mining company, but a technology company: BitFury has set their sites on being more than a chip maker.
With all this in mind, we were able to ask BitFury CEO Valery Vavilov through email about their next gen Bitcoin ASIC miner chips and future plans.
CCN Interview with BitFury
Could you tell CCN more about the energy efficiency chips at 0.2 joules-per-gigahash (J/GH) by the fourth quarter of 2014 and sub-0.1 J/GH by mid-year of 2015? Also can customers expect to see more miners for sale from BitFury with these chips as well as in the BitFury data centers?
Our last product BF4500, an upgraded version to our previous BF3500 model, today has 4.5 TH/s hashrate with power efficiency approximately 0,6 w/gh. BF4500 boxes based on our 55nm IC (Integrated Circuits) has J/GH energy improvement of approximately 30% compared to BF3500 box. We look forward to pushing toward our goal of 0.2 J/GH by Q4 with the release of our 4th generation IC this year, based on 28nm technology node. We are also working on sub-0.1 J/GH and plan to achieve it in our 5th generation of IC in 2015 – as always, it will be full-custom IC based on the latest existing technology node. With our new 4th generation IC, we will also have significant improvements not only on IC level, but on box and data center level. With this improvement, we will be able to provide highly efficient Bitcoin transaction processing service for our existing and new customers.
One of the interesting things is how BitFury views Bitcoin “mining”. BitFury considers and discusses mining as exactly what it is Transaction Processing. Their gearing towards this helps them draw investors and set up plans to be more than just a Bitcoin ASIC manufacturer. They are looking to be a technology company for computing power. BitFury’s business to business model allows them to be more nimble in its ways to cover the market and provide exactly what different companies needing computer power are looking to get. We will see a big shift with BitFury over the next few years beyond just Bitcoin ASICs.
BitFury is the backbone of so many Bitcoin Miner farms and systems. How has this growth affected BitFury and was this what helped with the recent Venture Capital fundraising? Also, since there was so much raised from VC funding what is the idea behind the IPO?
Thanks to the success of our Bitcoin transaction processing farms and other entities, we have a team of experts that work across many areas – investments, development, manufacturing, and operations. This enables us to offer a complete end-to-end service in-house, and deliver products to market with enviable speed, maximum efficiency, and low-cost. We have a number of investors that believe in our executive team, technology and potential for growth – it enables us to access capital very fast if needed, without the need to sell bitcoins. This last hot-round we have closed in record time – 1 week. These investments, as well as our own capital, meant that we did not have to sell Bitcoins at a very low price and allowed us to move forward without delays. The Bitcoin ecosystem is transparent and reliable for people who use it. It is our mission as a Bitcoin foundation and infrastructure provider is to be the most trusted and reliable Bitcoin transaction processor for our customers and for the ecosystem. An IPO will help our company to be trusted, transparent and reliable as well as to get access to capital for future expansion and growth.
BitFury has expanded to the point they have 70+ employees and continue to grow a Bitcoin success story.
How has, Bitcoin and Crypto Currencies changed the lives of you and your BitFury fellow owners and employees?
Bitcoin provides a unique opportunity for our talented team of engineers to innovate and touch many different parts of a growing industry. We are excited to be such a significant part of the Bitcoin ecosystem. We believe in the future of Bitcoin and expect continued growth catalyzed by the introduction of our 28nm ASIC chip.
What got you started in mining cryptocurrencies and Bitcoin?
As an entrepreneur, I’m constantly looking for ways to affect change. Being in one of the world’s emerging markets, the opportunity was great. The beauty of Bitcoin protocol is not a cryptocurrency itself, but the possibility to also use this platform in other fields. I believe that the future of the Bitcoin ecosystem is Smart Contracts, where you can use the Bitcoin blockchain to store any kind of agreements between parties – and part of it will be cryptocurrency. Our goal was to push the boundaries of science and technology to introduce truly groundbreaking products that facilitate Bitcoin, the Bitcoin network, and its infrastructure. In a short period, we’ve turned BitFury into one of the world’s largest technology companies with focus on Bitcoin, providing full cycle of infrastructure for Bitcoin transactions processing, and enabling the success of Bitcoin Ecosystem.
What do you think of the fast evolution of the mining industry with the introduction of ASICs and where do you see it going over next year?
We do not like the word mining – it does not fully represent what we are doing. We are not just mining bitcoin – we are processing Bitcoin transactions. The economics of Bitcoin transaction processing are based on three primary factors: 1) energy-efficiency of the infrastructure; 2) cost of the infrastructure; and 3) cost of electricity. Thus, at any given point in time, only the Bitcoin transaction processing equipment vendors that can deliver the most energy-efficient equipment with the most cost- efficient capital and operating costs will thrive. Those with more limited capabilities will struggle or drop out, likely resulting in a narrowing of the field over time. We also take pride in our ability to manufacture new IC every six months, a process that keeps us moving at the pace of the Bitcoin industry. Now we are living in a time or arm-race between Bitcoin transaction processing provider companies. Over the last 12-month network hashrate increased more than 200x times. To compare – the investments you needed to enter this market in 2013 was a few million U.S. dollars. This year you need at least $50 million, next year it will be at least $250+ million. We think next year we will see some consolidations and drop outs, as well as hashrate, growth stabilization with less aggressive growth.
What are the challenges you see home miners and smaller miners having as we go forward with larger and larger mining farms and cloud mining coming into play?
We expect Bitcoin transaction processing farms to continue playing a large role in the industry in the near future. Home users will switch to Cloud services and portable consumer Bitcoin processing devices. We believe that in few years more and more users will have consumer electronics with Bitcoin transaction processor inside. Bitfury is working on such a portable bitcoin processor for home users – this is one of our next products that we plan to present in the near future.
Portable Bitcoin Transaction processing would be amazing and to see that BitFury has this as a goal already in progress is exciting for the future.
How do you feel the low BTC value is affecting the mining industry?
The last price drop was a good shake for the industry. In my view, low BTC price affected the industry in a positive way because companies with less efficient infrastructure and no access to capital will drop out, and only professional service providers will stay in the market. This change will add stability and more predictable hashrate growth. Of course, it will not be as highly profitable as it is now, but we could have a good profit anyway. I believe in the long term perspective BTC price will grow.
What are your thoughts on Bitcoin mining especially becoming so centralized and do you see a solution?
Our goal as a big Bitcoin transaction processor to be trusted and reliable and an IPO will aid this trust and transparency.
The solution is simple:
1) we plan to sell 50% of all our capacity to different clients
2) we are working on a portable bitcoin transaction processor for home users, which will add even more decentralization to the Bitcoin transaction processing ecosystem.
Is there anything you would like to highlight about the BitFury and can we look forward to more of them in the future?
1) Our mission is to be the most trusted and reliable processor of Bitcoin Network transactions.
2) We are a fully integrated infrastructure provider – we produce ASICs, PCB boards, servers and data centers – everything in-house and everything full-custom that allows us to be a very efficient Bitcoin transaction processor.
3) We can access capital from our existing and new investors very quickly, if needed.
4) Our company’s management team and the board consists of industry veterans with execution history in silicon engineering, operational build-up and capitalizing businesses.
5) We feel our industry will benefit from an IPO of a bitcoin company and we are a good candidate for that.
6) While we are currently the leader in providing Bitcoin infrastructure, we envision further success when our technology becomes the industry standard and meet consumer demand for cutting edge Bitcoin products. As well as for portable bitcoin transactions processors and it usage in consumer electronics.
Could you tell me about the founding of BitFury and the Founders? How did it come to be and how they made the strategic right moves to become the largest ASIC Mining company?
It’s a long and very interesting story. This story I will tell you in the near future.
Is there anything you would like to add?
BitFury is continuing to push the boundaries and dream big with everything from mobile Bitcoin transaction processors to meeting other computing needs. We look forward to seeing more from BitFury and hearing the history behind BitFury when we can as Valery promised.
What do you think about BitFury’s moves this year and their plans for the future?
Images from BitFury and Shutterstock.