After a nine-month delay and a $3.8 million investment, Chinese mining company Linzhi finally ready to release its first batch of new miners for Ethereum and Ethereum Classic.
The company reported ordering the necessary components from the Taiwanese company TSMC, which will allow Linzhi to produce about 200 ASIC miners for testing. These miners should show the efficiency with Ethash algorithm, which is used in Ethereum and Ethereum Classic. In case of successful testing will be started mass production.
Network Ethereum bottom every year about 5 million ETH (about $800 million at today’s prices). In Ethereum Classic annually produces about 9 million ETC amounting to more than $60 million.
Linzhi company was founded in February 2018 Chen min, a former technical Director at the mining company Canaan Creative, which produces bitcoin miners Avalon. In comments to CoinDesk Chen said that his company was completely financed by his own funds ($3.8 million).
In September 2018, the company announced plans to release ASIC miners for Ethash. Target specifications for new miners was set to 1400 MH/s with power consumption of 1 kW⋅h. For comparison, TitanV 8 GTX from Nvidia, which is currently one of the most profitable GPU algorithm Ethash, shows 656 MH/s with power consumption 2.1 kWh (according to F2pool).
At the current price of live ($180) and complexity of the network and calculate the cost of electricity $0.04 per kWh, each GTX TitanV 8 will bring a daily profit of $7.35. If mine ETC on the same GTX TitanV 8, which is trading at a cheaper price and has a lower complexity of mining compared to air, the daily profit will still be about $6,70.
Since the announcement of their plans Linzhi spent almost all his capital on research and development of a new ASIC miner (worked 12), and ordering the first batch of components TSMC. The company had previously announced plans to order the first batch in December — the samples should be ready in April, and mass production would begin in June. Speaking about the delay, Chen said, «We underestimated the complexity of development and time required to build the team and ensure the efficiency of the company. We hope that more will be able to move on schedule, according to which test samples will be released 12/2019, and serial production will start 02/2020».
One of the possible risks to the business of the company is that the Ethereum community earlier voted for the activation of the so-called algorithm ProgPow to fix ASIC-miners, although the activation time of this algorithm is not yet defined (in the end, the developers of Ethereum want to move from consensus algorithm Proof-of-work to Proof-of-Stake, which will exclude mining). Answering the question whether Linzhi some backup plan in case a trigger occurs ProgPow, Chen said that the company expects more community Ethereum Classic, adding: «Our plan is to focus on mining ETC. It will be good if ETH will remain as an option. In the community of Ethereum about ProgPow still there is some uncertainty. Currently, we do not consider ETH as a potential market, so I don’t really care».
Although Chen has not yet named the price of ASIC miners (who plan to sell pre-orders), he said that he wanted to provide a payback period of four months for individual miners with relatively small orders.
«It is our effort and contribution to the idea of decentralization,» said Chen, adding: «Our sales in the first place will be focused on geographical distribution with a small «reverse discount» on large orders — this means that for large orders the customer will pay more.»