Tesla Buys $1.5 Billion in Bitcoin ( Bitcoin price)

0 134

Cryptocurrency’s price soars after electric-vehicle maker says it soon expects to accept customer payments in bitcoin.

Tesla Inc. said Monday that it bought $1.5 billion in bitcoin, a disclosure that follows Chief Executive Elon Musk’s promotion of the cryptocurrency and other digital-currency alternatives on Twitter.

Bitcoin took another large stride toward mainstream acceptance on Monday after billionaire Elon Musk’s electric vehicle company Tesla Inc revealed it had bought $1.5 billion of the cryptocurrency and would soon accept it as a form of payment for cars, sending the cryptocurrency shooting higher.

The electric-vehicle company also said it expects to start accepting bitcoin as payment for its products soon. Bitcoin prices jumped more than 10% after the announcement, according to cryptocurrency research and news site CoinDesk.

Tesla disclosed its bitcoin purchase in its latest annual report, saying the move aims to “diversify and maximize returns on our cash that is not required to maintain adequate operating liquidity.” Tesla said a board committee had approved changes to company rules on investments, adding that it can also invest cash in gold bullion and gold exchange-traded funds among other assets.

The bitcoin purchase, likely among the largest by a public company, comes after a rally in 2020 when the price more than quadrupled. Tesla is joining a handful of other companies that have disclosed bitcoin holdings. Software developer MicroStrategy Inc. acquired about $425 million worth of bitcoin last summer, and its CEO, Michael Saylor, has become an outspoken proponent.

Companies holding bitcoin in their treasuries face an accounting risk: Because bitcoin and other digital assets are considered “indefinite-lived intangible assets,” rather than currencies, any decrease in their value below what the company paid for them—even a temporary one—can force a company to write down the value, taking an impairment charge. MicroStrategy posted a net loss in the third quarter of 2020 because the price of bitcoin dropped temporarily in September.

“I think bitcoin is really on the verge of getting broad acceptance by sort of the conventional finance people,” he said last week on the social-networking app Clubhouse. Mr. Musk said he needed to be cautious with his public statements about cryptocurrencies because “some of these things can really move the market.”

bitcoin price about to crashbitcoin price on datebitcoin price on coinbasebitcoin price on lunobitcoin price on different exchangesbitcoin price on 2009bitcoin price on zebpaybitcoin price on binancebitcoin price across exchangesbitcoin price across all exchangesbitcoin price across timewhy is bitcoin price different on exchangeswhy are bitcoin prices different on different exchangeswhat are the top bitcoin exchangeshow to exchange bitcoinbitcoin price after hoursbitcoin price after halvingbitcoin price after electionbitcoin price after 5 yearsbitcoin price after marketbitcoin price after halving chartbitcoin price after christmasbitcoin price after halving historybitcoin price against usdbitcoin price against dollarbitcoin price against goldhow much is $1 worth in bitcoinhow much is $100 in bitcoinshow much is $1 in bitcoinbitcoin price around the worldbitcoin price around halvingbitcoin price allbitcoin price by countrybitcoin price worldwidebitcoin price as of nowbitcoin price as of todaybitcoin price as at 2010bitcoin price as at 2017bitcoin price as at 2009bitcoin price as at 2015bitcoin price as at 2016bitcoin price as at january 2020bitcoin price at startbitcoin price at launchbitcoin price at gold market capbitcoin price at the end of 2021bitcoin price at 2012bitcoin price at halving 2020bitcoin price at ipobitcoin price at its highestbitcoin price before 2015bitcoin price before 1 yearbitcoin price before 2010bitcoin price before covid 19bitcoin price before 1 monthbitcoin price before 6 monthsbitcoin price before halvingbitcoin price before 5 years in indiabitcoin price between datesbitcoin price difference between exchangesbitcoin price difference between countriesthe bitcoin price formation beyond the fundamental sourcesbitcoin price by yearbitcoin price by end of 2021bitcoin price by datebitcoin price by monthbitcoin price by daybitcoin price by 2025bitcoin price by 2030bitcoin price by year chartwill bitcoin price come downwill bitcoin come down againwill bitcoin price go down againwill bitcoin price drop againwhy bitcoin price going downbitcoin price down todaybitcoin price down whybitcoin price down reasonbitcoin price down 2021bitcoin price downbitcoin price going downbitcoin price going down todaybitcoin price going down or highbitcoin price during covidbitcoin price during electionsbitcoin price during 2013bitcoin price during pandemicbitcoin price during halvingbitcoin price during christmasbitcoin price during 2010bitcoin price during 2020bitcoin price for todaybitcoin price for 2021bitcoin price for 1bitcoin price for onebitcoin price for 2020bitcoin price for 1 sharebitcoin price for january 2021bitcoin price for the yearbitcoin price from beginningbitcoin price from 2015 to 2020bitcoin price from 2019 to 2020bitcoin price from 2013bitcoin price from 2009 to 2019bitcoin price from 2015bitcoin price from 2017bitcoin price from 2009 to 2020 graphbitcoin price in 2010bitcoin price in usdbitcoin price in 2013bitcoin price in 2012bitcoin price in indiabitcoin price in 2011bitcoin price in 2015bitcoin price in 2020bitcoin price into excelbitcoin price into usdbitcoin price into inrbitcoin price into pkrimport bitcoin price into excelhow to get live bitcoin price in excelbitcoin price be likehow much should bitcoin be worthhow much would a bitcoin be worthhow much will bitcoin be worthhow to invest in bitcoin pricehow much would $100 in bitcoin be worth todaybitcoin price mid 2021how much will bitcoin be worth in 2021will bitcoin go up in 2021bitcoin price end of 2021what will bitcoin be worth in 2021bitcoin price by 2021bitcoin price near mebitcoin price near exhaustionbitcoin price near halvingbitcoin price in near futurehow to buy bitcoin price todayhow to get bitcoin cheaphow to check bitcoin pricebitcoin price of bitcoinbitcoin price of all timebitcoin price of indiabitcoin price of $10bitcoin price of the daybitcoin price of 2011bitcoin price of transactionbitcoin price of last 10 daysbitcoin price sell offbitcoin start off priceprice of bitcoinhow to sell off bitcoinbitcoin price buy or sellhow to sell and buy bitcoinsbitcoin price on january 1 2020bitcoin price on releasebitcoin price on robinhoodbitcoin price on 2012bitcoin price on 2015bitcoin price on march 2020bitcoin price topwhat was bitcoin at its highesthow much was bitcoin at its highestwhat price is bitcoin atwhat is the most expensive bitcoin has beenbitcoin price cash outbitcoin price when it came outbitcoin price when first came outhow to cash out in bitcoinhow much does it cost to cash out bitcoinbitcoin price over the yearsbitcoin price over timebitcoin price over the last 10 yearsbitcoin price over the last yearbitcoin price over 2020bitcoin price over last 6 monthsbitcoin price over last 5 yearsbitcoin price over last 12 monthsbitcoin price last yearbitcoin price last 10 yearsbitcoin price last 6 monthsbitcoin price last 3 monthsbitcoin price last 12 monthsbitcoin price last 30 daysbitcoin price last year 2019bitcoin price last 48 hoursbitcoin price per sharebitcoin price per yearbitcoin price per dollarbitcoin price per satoshibitcoin price per hourbitcoin price per daybitcoin price per stockbitcoin price per share todaybitcoin price plus 500bitcoin plus pricebitcoin plus price predictionhow much is 500 bitcoin worthhow much is 500 dollars worth in bitcoinhow much is 500 in bitcoinbitcoin price post halvingbitcoin price prediction post halvingbitcoin price bullion by postwill bitcoin price drop after halvingbitcoin price pre marketbitcoin price pre 2013bitcoin price pre halvingbitcoin price pro coinbasebitcoin price probitcoin price alert coinbase probitcoin price chart coinbase probitcoin price gbp coinbase probitcoin miner s17 pro pricewhy does coinbase charge more for bitcoincan you convert bitcoin to cash on coinbasebitcoin price since 2009bitcoin price since inceptionbitcoin price since 2010bitcoin price since 2018bitcoin price since 2011bitcoin price since marchbitcoin price since 2014bitcoin price since january 2020bitcoin price through the yearsbitcoin price through 2020bitcoin price through historybitcoin price chart through the yearsbitcoin price prediction through opinion miningwhat is the highest price bitcoin has ever beenwhat could bitcoin be worth in 10 yearshow much will bitcoin be worth in 10 yearsbitcoin highest price till nowbitcoin highest price till datebitcoin price history till datewhat is the highest price bitcoin has reachedwhat was highest price of bitcoinbitcoin price to usdbitcoin price to buybitcoin price to nairabitcoin price to dollarbitcoin price to buy todaybitcoin price to us dollarbitcoin price to dropbitcoin price to sellbitcoin price up todaybitcoin price up and downbitcoin price up againbitcoin price up to datebitcoin price upbitcoin price going upbitcoin price going up or downbitcoin price goes upvia bitcoin pricehow much bitcoin is $1bitcoin price vs ethereumbitcoin price vs goldbitcoin price vs dollarbitcoin price vs stock marketbitcoin price vs bitcoin cash pricebitcoin price vs gbtcbitcoin price vs litecoinbitcoin price vs google trendsbitcoin price with volumebitcoin price with dollarbitcoin price with timebitcoin price with halvingbitcoin price with yearbitcoin price with usdbitcoin price with electionbitcoin price with moving averagesbitcoin price worth in 2021bitcoin price worthhow much will bitcoin be worth in 2025how much will bitcoin be worth in 2022

Tesla didn’t respond to a request for comment. The company said in its report that it updated its investment policy in January but didn’t disclose the exact timing of either its board decision or its bitcoin purchase.

“He’s already telegraphed it to the market,” said Meltem Demirors, chief strategy officer at London-based asset management firm CoinShares, referring to Mr. Musk’s mentioning bitcoin in his Twitter biography. “One of the world’s largest corporations doing this—I think it opens the floodgates.”

Recently, Mr. Musk’s tweets about dogecoin, a cryptocurrency started as a joke in 2013, have helped drive up that virtual currency’s price.

Tesla has struggled to maintain cash while ramping up vehicle production, but its shares soared some 480% in the year ended Friday as investors piled into electric-vehicle makers and the company reported a string of quarterly profits. Tesla took advantage of that surge by selling billions of dollars in new stock, shoring up its cash position. The company’s cash holdings totaled around $19.4 billion at the end of last year, up from around $6.3 billion at the end of 2019.

Mr. Musk’s tweets have drawn regulatory scrutiny, including from the Securities and Exchange Commission over a 2018 post in which the CEO said he had secured funding to take Tesla private. Mr. Musk and the SEC later settled in a deal requiring the company to sign off on any written statements he made that could be deemed material. He has since mocked the regulator on Twitter.

The SEC is unlikely to challenge Mr. Musk over his bitcoin tweets, said John Coffee Jr., a Columbia University law professor who specializes in securities law, especially after a federal judge rebuked the commission when it sought to hold the CEO in contempt in 2019. Tesla didn’t respond to a request for comment about whether Mr. Musk had sought approval for his bitcoin commentary.

bitcoin price prediction
bitcoin price usd
bitcoin price history
bitcoin price prediction 2021
bitcoin price 2012
bitcoin price target
bitcoin price 2013
bitcoin price prediction 2025
bitcoin price today
bitcoin price analysis
bitcoin price alert
bitcoin price all time
bitcoin price aud
bitcoin price alert app
bitcoin price all time high
bitcoin price ath
bitcoin price after hours
the bitcoin price prediction
the bitcoin price ticker
buy a bitcoin price
what is a bitcoin price correction
bitcoin price a share
how much is 1 bitcoin price
how much is 1 bitcoin
how much is 1 bitcoin to buy
bitcoin price by year
bitcoin price binance
bitcoin price by date
bitcoin price buy
bitcoin price bubble
bitcoin price by day
bitcoin price by 2021
bitcoin price beginning
bitcoin price chart
bitcoin price coinbase
bitcoin price calculator
bitcoin price cad
bitcoin price chart all time
bitcoin price coinmarketcap
bitcoin price current
bitcoin price crash
how much would $100 in bitcoin be worth today
what would $100 in bitcoin be worth today
bitcoin price dollar
bitcoin price drop
bitcoin price december 2017
bitcoin price december 2020
bitcoin price data
bitcoin price dip
bitcoin price december 2019
bitcoin price drop prediction
btc.d price
what is the current price of btc
how much is $100 btc
how much is 10 btc
what is the fees of btc
bitcoin price elon musk
bitcoin price euro
bitcoin price estimate
bitcoin price elon
bitcoin price end of 2021
bitcoin price expectations
bitcoin price estimate 2021
bitcoin price ethereum
e yuan cryptocurrency price
unit-e cryptocurrency price
e-krona cryptocurrency price
e-dinar crypto price
e-money crypto price
bitcoin price e
bitcoin price forecast
bitcoin price forecast 2021
bitcoin price future
bitcoin price forecast 2025
bitcoin price february 2020
bitcoin price from beginning
bitcoin price forecast 2022
bitcoin price fluctuation
price of bitcoin
what is the current price of bitcoins
what is the average price of bitcoin
bitcoin price graph
bitcoin price graph all time
bitcoin price google
bitcoin price gbp
bitcoin price going up
bitcoin price graph 2020
bitcoin price going down
bitcoin price google sheets
how much does it cost to buy bitcoins
how to buy bitcoin price today
how much is 1 bitcoin 2020
bitcoin price history chart
bitcoin price history 2020
bitcoin price high
bitcoin price highest
bitcoin price history 2019
bitcoin price historical
bitcoin price how to buy
bitcoin price in usd
bitcoin price in 2010
bitcoin price in 2013
bitcoin price in 2017
bitcoin price in 2012
bitcoin price in india
bitcoin price in 2011
bitcoin price in 2015
i bitcoin price in india
i bitcoin price in pakistan
i bitcoin value in inr
how to invest in bitcoin price
how much is $100 in bitcoin worth
bitcoin price jump
bitcoin price january 2020
bitcoin price jump today
bitcoin price january 2021
bitcoin price july 2020
bitcoin price january 2018
bitcoin price january 2017
bitcoin price jan 1 2020
bitcoin price kitco
bitcoin price kraken
bitcoin price korea
bitcoin price korean won
bitcoin price keeps going up
bitcoin price kaggle
bitcoin price keiser
bitcoin price live
bitcoin price k line
what price is bitcoin right now
how to read bitcoin price
what price is bitcoin at
bitcoin price last week
bitcoin price live chart
bitcoin price live ticker
bitcoin price last 10 years
bitcoin price log scale
bitcoin price last 6 months
bitcoin price lifetime
bitcoin price l
how much is $4 in bitcoin
bitcoin price march 2020
bitcoin price manipulation
bitcoin price may 2013
bitcoin price may 2020
bitcoin price market cap
bitcoin price may 9 2013
bitcoin price max
bitcoin price map
bitcoin price.m
what is the price of bitcoin in dollars
how much is $100 in bitcoin
how much is $100 in btc
bitcoin price now
bitcoin price news
bitcoin price news today
bitcoin price now usd
bitcoin price notification
bitcoin price november 2020
bitcoin price now live
bitcoin price notification app
bitcoin and price
bitcoin price over time
bitcoin price over the years
bitcoin price outlook
bitcoin price october 2020
bitcoin price on date
bitcoin price over the last 10 years
bitcoin price on coinbase
bitcoin price on january 1 2020
bitcoin price prediction 2040
bitcoin price prediction today
bitcoin price projections
bitcoin price prediction 2030
bitcoin price prediction 2020
bitcoin price p
how to price bitcoin
bitcoin price 2019
bitcoin price quote
bitcoin price quote today
bitcoin price que es
bitcoin price qatar
bitcoin price qar
bitcoin price quora
bitcoin price quantum computing
q cryptocurrency price
q crypto price
bitcoin price right now
bitcoin price robinhood
bitcoin price reddit
bitcoin price real time
bitcoin price record
bitcoin price rn
bitcoin price rise
bitcoin price return calculator
reddit bitcoin price
reddit bitcoin price prediction
reddit bitcoin price 2020
reddit bitcoin price tracker
reddit crypto price predictions
reddit crypto price
bitcoin r value
bitcoin price stock
bitcoin price surge
bitcoin price september 2020
bitcoin price since 2009
bitcoin price start
bitcoin price symbol
bitcoin price stocktwits
bitcoin price simulator
bitcoin prices
aladdin miner 16th/s bitcoin price
how much is $100 in bitcoins
how much does it cost 1 bitcoin
bitcoin price today in usd
bitcoin price ticker
bitcoin price target 2021
bitcoin price tarkov
bitcoin price tesla
bitcoin price timeline
t rowe price bitcoin
bitcoin price t
bitcoin price usd today
bitcoin price us
bitcoin price uk
bitcoin price usd now
bitcoin price usa
bitcoin price usd history
bitcoin price up
btc price us
bitcoin u.s price
what is the price of the bitcoin today
what is the current price of 1 bitcoin
bitcoin price value
bitcoin price volume
bitcoin price vs ethereum
bitcoin price vs gold
bitcoin price volatility
bitcoin price vs dollar
bitcoin price vs stock market
bitcoin price vs gbtc
bitcoin sv price
ethereum v bitcoin price
vechain crypto price
bitcoin v dollar price
bitcoin price v usd
how much is bitcoin sv
is bitcoin sv good investment
is bitcoin sv worth it
bitcoin price when started
bitcoin price widget
bitcoin price watch
bitcoin price will drop
bitcoin price widget android
bitcoin price widget iphone


bitcoin price wiki
bitcoin price will crash
bitcoin price xrp
bitcoinx price
bitcoinx price prediction
btc.x price
btc.x price target
x sigma crypto price
pundi x crypto price
falcon x crypto price
zero x crypto price
bitcoin price yahoo
bitcoin price yesterday
bitcoin price year
bitcoin price year 2010
bitcoin price ytd
bitcoin price year 2013
bitcoin price year 2012
bitcoin price youtube
bitcoin price zar
bitcoin price zero
bitcoin price zebpay
bitcoin price zar today
bitcoin price zar luno
bitcoin price za
bitcoin price zloty
bitcoin price zimbabwe
bitcoin z price
bitcoin z value
bitcoin price 09
bitcoin price 0.06
bitcoin price 0.01
bitcoin price 0.001
bitcoin price 0.1
bitcoin price 0.05
bitcoin price 0.002
bitcoin price 0.2
bitcoin zero price
bitcoin zero price prediction
buy bitcoin zero fees
will bitcoin hit zero
will bitcoin go to zero
bitcoin price 10 years ago
bitcoin price 100
bitcoin price 100k
bitcoin price 10 year chart
bitcoin price 1 million
bitcoin price 10000
bitcoin price 1000
bitcoin price 1/1/2020
1 bitcoin price in india
1 bitcoin price in 2015
1 bitcoin price in 2010
1 bitcoin price in 2017
1 bitcoin price in usd
1 bitcoin price in 2016


1 bitcoin price in pakistan
1 bitcoin price in 2009
bitcoin price 2010
bitcoin price 2011
bitcoin price 2021
bitcoin price 2030
bitcoin price 2025
bitcoin price 2022
bitcoin 2 price prediction
2 bitcoin value
1/2 bitcoin price
2 year bitcoin price chart
earth 2 crypto price
bitcoin price 2 years ago
bitcoin price 2 years ago in inr
bitcoin price 2 years back
bitcoin price 3 years ago
bitcoin price 3 months
bitcoin price 300k
bitcoin price 30 days
bitcoin price 300
bitcoin price 3 years
bitcoin price 30k
bitcoin price 3000
3 bitcoin price in india
3 btc price
3 bitcoin value
3 month bitcoin price
3 january 2009 bitcoin price
bitcoin 3 year price chart
3 drivers of bitcoin prices in 2021
bitcoin price 4 years ago
bitcoin price 4 months ago
bitcoin price 4/14/17
bitcoin price 400k
bitcoin price 40k
bitcoin price 40000
bitcoin price 42000
bitcoin price 4000
1/4 bitcoin price
4/14/17 bitcoin price
bitcoin price 4 years
how much is 4 bitcoin worth
how much is 4 bitcoin
bitcoin price 5 years ago
bitcoin price 5 years
bitcoin price 52 week low
bitcoin price 5 months ago
bitcoin price 5 year chart
bitcoin price 500k
bitcoin price 5000
bitcoin price 500
5 bitcoin price in india
5 bitcoin price usd
5 btc price
5 bitcoin value
5 year bitcoin price chart
5 years bitcoin price history chart
top 5 cryptocurrency prices
bitcoin 5 year price prediction
bitcoin price 6 months
bitcoin price 6 years ago
btc price 6 years ago
cryptocurrency prices 6 months
crypto 66 price
bitcoin price six years ago
bitcoin price six months ago
bitcoin price last 6 months india
6 bitcoin value
bitcoin 6 month price
bitcoin price 6 months ago
bitcoin price 6 cents
how much is 6 bitcoin worth
how much is 6 bitcoin
how much is 7 bitcoin worth
bitcoin price 7 years ago
bitcoin price 7 days
bitcoin price 7000
bitcoin price 7500
bitcoin price 7 jan 2021
bitcoin price 7 months ago
bitcoin price 7 days ago
bitcoin price 7 january 2021
7 day bitcoin price
7 years ago bitcoin price
how much is 7 bitcoin
bitcoin price 8 february 2021
bitcoin price 8 years ago
bitcoin price 8 december 2017
bitcoin price 80000
bitcoin price 8 months ago
bitcoin price 8 january 2021
bitcoin price 8 years
bitcoin price 8000
8 bitcoin value
how much is 8 bitcoin worth
how much is 8 bitcoin
how much is 1/8 of a bitcoin
bitcoin price 9 years ago
bitcoin price 90 days


bitcoin price 9/30/20
bitcoin price 9 may 2013
bitcoin price 99
bitcoin price 9 january 2021
bitcoin value 9 years ago
btc 9100 price
9 may 2013 bitcoin price
july 9 2016 bitcoin price
how much is a 2013 bitcoin worth
what was the price of bitcoin in 2013
how much was bitcoin in 2013
how many bitcoins were there in 2013

Mr. Musk’s online remarks can move markets. After touting online shopping site Etsy Inc. in January, the stock rose more than 8% on the open. Shares in CD Projekt SA, the maker of the troubled Cyberpunk 2077 game, rose more than 15% after Mr. Musk praised the game. Both stocks retreated later. Last year, Mr. Musk tweeted that he thought Tesla’s share price was too high. The market agreed, and the stock fell before recovering.

An affinity for bitcoin seems a natural fit for Mr. Musk, who has bristled at government constraints. Last year he battled local authorities in California that ordered his lone U.S. car plant closed as part of broader measures to curb the pandemic. Mr. Musk reopened the facility after several weeks, daring authorities to arrest him. They didn’t.

Part of bitcoin’s appeal for some holders is that it isn’t circulated or controlled by a government or nation. Unlike opening up a bank account to store dollars, euros or yen, starting a bitcoin account doesn’t require providing identifying information. Bitcoin is effectively anonymous, and law enforcement can’t freeze a bitcoin account as they could a bank account.

Payments company Square Inc., which shares bitcoin advocate Jack Dorsey as its CEO with Twitter Inc., acquired about $50 million worth for its corporate treasury in October. Massachusetts Mutual Life Insurance Co. acquired $100 million worth in December to hold in its general investment account.

Companies might have grown more optimistic about bitcoin after the March 2020 selloff, when it recovered faster than the broader stock market, said Joel Kruger, a currency strategist at LMAX Group.

The added wrinkle with Tesla is the plan to accept bitcoin from customers. Few companies now accept bitcoin directly as payment; Overstock.com Inc. is among the few that do. Some large companies experimented with bitcoin payments in 2014 and 2015, like Dell Technologies Inc. and Expedia Group Inc., but most later dropped it for lack of use.

While Tesla’s move would be high profile, a more substantial development is expected later this year, when PayPal Holdings Inc. plans to allow its customers to use their bitcoin holdings for payments.

Mr. Musk’s ties to the financial-services industry date to the 1990s, when he invested most of the $22 million he earned from the sale of an internet business into a new startup, X.com, that became PayPal. EBay Inc. bought PayPal for $1.4 billion in 2002.

As the largest shareholder, a 31-year-old Mr. Musk collected more than $100 million. He used the money to start Tesla and Space Exploration Technologies Corp., the rocket company he also runs, as well as solar-cell company SolarCity, now part of Tesla.

Why the Biggest Bitcoin Mines Are in China.

It’s only 8 in the morning when I arrive at my destination in the Ordos prefecture of Inner Mongolia, but already the air is heavy and oppressively hot. My host drives me through a gate, past a sleepy-looking security guard, and into an industrial yard that extends into the dry, barren countryside about as far as I can see.

In front of me are nine warehouses with bright blue roofs, each emblazoned with the logo for Bitmain, a Chinese firm headquartered in Beijing that is arguably the most important company in the Bitcoin industry. Bitmain sells Bitcoin mining rigs—the specialized computers that keep the cryptocurrency running and that produce, or “mine,” new bitcoins for their owners. It also uses its own rigs to stock facilities that it owns or co-owns and operates. Bitmain owns about 20 percent of this one.

Jihan Wu, the CEO of Bitmain, claims that 70 percent of the Bitcoin mining rigs in operation today were made by his company. And, according to a study conducted last winter by the University of Cambridge, in England, it’s likely that most of those machines are plugged into an outlet somewhere in China.

Bitmain acquired this mining facility in Inner Mongolia a couple years ago and has turned it into one of the most powerful money factories on the Bitcoin network. It quite literally metabolizes electricity into money. By my own calculations, the hardware on the grounds—some 21,000 computers—accounted for about 4 percent of all the computing power in the Bitcoin network when I visited.

Like 10-ton paperweights, these machines bear down on the globally distributed ledger of transactions that is Bitcoin, keeping its pages from ever turning backward. Here is where the supply of existing bitcoins is secured. And here is where the banquet of new bitcoins is served.

img
Photo: Stefen Chow

The process of mining bitcoins works like a lottery. Bitcoin miners are competing to produce hashes—alphanumeric strings of a fixed length that are calculated from data of an arbitrary length. They’re producing the hashes from a combination of three pieces of data: new blocks of Bitcoin transactions; the last block on the blockchain; and a random number. These are collectively referred to as the “block header” for the current block. Each time miners perform the hash function on the block header with a new random number, they get a new result. To win the lottery, a miner must find a hash that begins with a certain number of zeroes. Just how many zeroes are required is a shifting parameter determined by how much computing power is attached to the Bitcoin network. Every two weeks, on average, the mining software automatically readjusts the number of leading zeros needed—the difficulty level—by looking at how fast new blocks of Bitcoin transactions were added. The algorithm is aiming for a latency of 10 minutes between blocks. When miners boost the computing power on the network, they temporarily increase the rate of block creation. The network senses the change and then ratchets up the difficulty level. When a miner’s computer finds a winning hash, it broadcasts the block header to its next peers in the Bitcoin network, which check it and then propagate it further.

Then two things happen. New transactions are added to the Bitcoin blockchain ledger, and the winning miner is rewarded with newly minted bitcoins. The miner also collects small fees that users voluntarily tack onto their transactions as a way of pushing them to the head of the line. It’s ultimately an exchange of electricity for coins, mediated by a whole lot of computing power. The probability of an individual miner winning the lottery depends entirely on the speed at which that miner can generate new hashes relative to the speed of all other miners combined. In this way, the lottery is more like a raffle, where the more tickets you buy in comparison to everyone else makes it more likely that your name will be pulled out of the hat.

img
Photo: Stefen Chow

These dynamics have resulted in a race among miners to amass the fastest, most energy-efficient chips. And the demand for faster equipment has spawned a new industry devoted entirely to the computational needs of Bitcoin miners. Until late 2013, generic graphics cards and field-programmable gate arrays (FPGAs) were powerful enough to put you in the race. But that same year companies began to sell computer chips, called application-specific integrated circuits (ASICs), which are specifically designed for the task of computing the Bitcoin hashing algorithm. Today, ASICs are the standard technology found in every large-scale facility, including the mining farm in Ordos. When Bitmain first started making ASICs in 2013, the field was thick with competitors—BitFury, a multinational ASIC maker; KnCMiner in Stockholm; Butterfly Labs in the United States; Canaan Creative in Beijing; and about 20 other companies spread around China.

Bitmain gained an edge by supplying a superior product in large quantities, a feat that has eluded every other company in the industry. The Ordos facility is stuffed almost exclusively with Bitmain’s best performing rig, the Antminer S9. According to company specs, the S9 is capable of churning out 14 terahashes, or 14 trillion hashes, every second while consuming around 0.1 joules of energy per gigahash for a total of about 1,400 watts (about as much as a microwave oven consumes).

Although BitFury claims to be producing chips whose performance is nearly identical to those used in the S9, the company has packaged them into a very different product. Called the BlockBox, it’s a complete bitcoin-mining data center that BitFury ships to customers in a storage container. Beijing’s Canaan Creative is still selling mining rigs to the public, but it offers only one product, the AvalonMiner 741, and it’s only half as powerful and slightly less efficient than the S9.

img
Photo: Stefen Chow

An Antminer S9 houses 189 ASICs fabricated by the Taiwan Semiconductor Manufacturing Company (the world’s biggest foundry), using its 16-nanometer manufacturing process.

Each ASIC has more than 100 cores, all of which operate independently to run Bitcoin’s SHA-256 hashing algorithm. A control board on the top of the machine coordinates the work, downloading the block header to be hashed and distributing the problem to all the hashing engines, which then report back with solutions and the random numbers they used to get them.

It’s “sort of like an ant colony, where the control board is the queen directing the workers,” says Peter Holm, the director of integrated circuit design at Bitmain, revealing the inspiration for the rig’s name.

All mining ASICs, Bitmain’s included, are performing essentially the same computation—the SHA-256 hashing algorithm—even if they go about it a bit differently. The standard algorithm takes 64 steps to complete, but in Bitcoin it is run twice for each block header, meaning a full round requires 128 steps that are heavy on integer addition. “That’s what dominates the whole design,” says Timo Hanke, the chief cryptographer at String Labs, a cryptography-focused incubator in Palo Alto, Calif. “So, if somebody was to optimize it, they have to optimize the adders. That’s where most of the work is.”

img
Photo: Stefen Chow

Despite having similar needs, there is a good deal of diversity in how chip designers build their hashing engines, says Hanke, who also served as the chief technology officer of a now-defunct mining rig manufacturer called CoinTerra. For example, Bitmain uses pipelining—a strategy that links the steps in a process into a chain in which the output of one step is the input of the next. Bitmain competitor BitFury has chosen not to use that technology.

The most pressing problem in the mining chip design is power efficiency, because your return on investment is the difference between how much money you spend on electricity versus how many new bitcoins you can win.

“Here, power is more important than absolute speed. You’re not designing the adders for maximum possible speed, but you’re designing them for the maximum power efficiency,” says Hanke.

If you’re doing your job right, you’re also desperately looking for a way to keep the chips cool. The S9 is meant to operate below 38 °C. A controller on top of the machine samples the ambient temperature and sets the fan speed and the voltage and clock speed of the machine accordingly.

But such measures aren’t enough if you’re mining in a place like Inner Mongolia.

img
Photo: Stefen Chow

Inside the warehouse in Ordos, it’s dark, loud, and windy.

A young man named Zhang brings me inside, shouting over a deafening whir. “This is the cool side,” he tells me. All along a wall of the warehouse, the windows have been removed from their frames and replaced with desert fans—panels of twisted, tightly packed metal strips that are being doused with water from a pipe above.

Zhang walks up to a door between two shelves full of mining rigs, and we step through. “This is the hot side,” he tells me. We’re standing in an empty, brightly lit space that serves as the heat dump for the facility. The exhaust fans from all the mining machines on the other side are poking out through little holes in a metal wall, blasting hot air into the space, where it gets purged to the outside by another wall full of giant metal fans.

With the Antminers needing to stay below 38 °C, Mongolia is not the ideal location for a mining facility. It had been above 40 °C for several days when I visited in July. And in the winter, it can fall to –20 °C, cold enough for Bitmain to add insulation to the facilities. Dust is a problem as well, which is why the interior of every warehouse I walk through is veiled in a fine fabric filter.

img
Photo: Stefen Chow

To save money on cooling, some mine operators have opted for cooler climates. BitFury also runs three large mining facilities, one of which is in Iceland to benefit from the cool weather. “Many data centers around the world have 30 to 40 percent of electricity costs going to cooling,” explains Valery Vavilov, the CEO of BitFury. “This is not an issue in our Iceland data center.”

The other two BitFury mines are in Tbilisi, in the Republic of Georgia, where the weather is much warmer. According to Vavilov, the company has developed a two-phase immersion cooling technology with their subsidiary, Allied Control. The system bathes the mining machines in a dielectric heat-transfer liquid called Novec, which cools the computers as it evaporates. The system is now deployed at the Georgia data centers.

img
Photo: Stefen Chow

While heat is definitely an issue for the mining farm in Ordos, the electricity there is dirt cheap, only 4 U.S. cents per kilowatt-hour, with government subsidies. That’s about one-fifth of the average price in the United Kingdom. The only other costs for the facility are the rigs themselves and the salary of the few dozen staff that keeps them operational.

Zhang is part of that staff. He recently graduated from college in Inner Mongolia and started working at the mine only a few months ago. He describes himself as a technician, then points to a man who is standing on a pneumatic lift pulling a mining rig out of the racks. “That’s what I do,” he tells me.

The controller on the S9 has a red light that goes off when it detects a malfunction. Technicians like Zhang are on hand to scan the racks for sick rigs. When they find one, they pull it out and send it to a house on the factory lot where other technicians diagnose the problem, fix it, and get the machine back on the line. Sometimes it’s a failed chip. Other times it’s a burned-out fan. If the problem is more serious, then the rig gets sent all the way to Bitmain’s labs in Shenzhen in southeast China for a proper rebuild. Every moment the rigs spend unplugged, potential revenue slips away.

Given the price of bitcoin at the time I visited Ordos, each individual mining rig at the facility was making around US $10 in bitcoins per day. At that rate, the facility as a whole, which houses over 20,000 Antminer rigs, could bring in $70 million or more per year. And this is just one of the facilities that Bitmain runs.

img
Photo: Stefen Chow

But due to the volatility of bitcoin, it’s impossible to predict the annual revenue of a mining farm. On my flight from China back to the United States, the price of bitcoin crashed 25 percent, from $2,400 to $1,800. In no time at all the operation I visited was bringing in $50,000 less per day. Within a week it was back up, and approaching an all-time high.

Price fluctuations, which have been common in Bitcoin since the day it was created eight years ago, saddle miners with risk and uncertainty. And that burden is shared by chip manufacturers, especially ones like Bitmain, which invest the time and money in a full custom design. According to Nishant Sharma, the international marketing manager at Bitmain, when the price of bitcoin was breaking records this spring, sales of S9 rigs doubled. But again, that is not a trend the company can afford to bet on.

And so, Bitmain has begun to diversify. In addition to Bitcoin businesses, the company has also started to dabble in artificial intelligence and is developing facial-recognition hardware that it plans to sell to the Chinese government.

Competing ASIC maker BitFury has also started seeking profit from nonmining industries. “While we began as just a mining company back in 2011, our company has significantly expanded its reach since then,” says CEO Vavilov. Among other things, BitFury is now providing its immersion cooling technology to high-performance data centers that are not involved in Bitcoin.

img
Photo: Stefen Chow

For Bitmain CEO Jihan Wu, the of pursuing new revenue streams is a way of protecting the company’s role in Bitcoin, a technology that he describes adoringly. “It’s quite personal that I wanted Bitcoin to be successful,” says Wu. “But as a company we are not allowed to solely rely on the success of Bitcoin. That’s a thing we cannot afford.”

The uncertainty may explain why the giants of the semiconductor industry have thus far shied from entering the fray. But if bitcoin prices remain high, that could change.

“It’s a real testament to Bitmain that they’ve been able to fend off the competition they have fended off. But still, you haven’t seen an Intel and a Nvidia go full hog into this sector, and it would be interesting to see what would happen if they did,” says Garrick Hileman, an economic historian at the London School of Economics who compiled a miner survey with the University of Cambridge.

img
Photo: Stefen Chow

What would it take for a competitor to nudge into the fray? For starters, it has to be willing to put a lot of money on the line. Several million dollars can go into chip design before a single prototype is produced. “It takes the willingness to pull the trigger and pay the money,” says Hanke. But he’s confident it will happen. “People will see it’s profitable, and they will jump in.”

Indeed, it may already be happening. This September, GMO Internet Group, a Japanese company with 135 billion yen (US $1.2 billion) in revenues, announced that it was developing its own mining ASIC utilizing 7-nanometer-process technology.

Such disruption would be welcome news to some in the community who argue that Bitmain’s outsized market position in mining hardware is itself a threat to Bitcoin.

This spring, Bitmain caused a minor uproar when a developer found a “backdoor,” called Antbleed, in the firmware of Bitmain’s S9 Antminers. The backdoor could have been used by the company to track the location of its machines and shut them down remotely. While no computer purchaser would find such a vulnerability acceptable, it’s particularly troubling for Bitcoin.

img
Photo: Stefen Chow

The Bitcoin protocol was designed to encourage the distribution of hashing power among miners rather than its concentration. The reason? Miners wield power not only over which transactions get added to the Bitcoin blockchain but over the evolution of the Bitcoin software itself. When updates are made to the protocol, it is the miners, largely, who enforce these changes. If the miners band together and choose not to deploy an update from Bitcoin’s core developers, they can stall transactions or even cause the currency to split into competing versions.

A backdoor like Antbleed, if utilized, would give an ASIC manufacturer the power to effectively silence miners who support a version of the Bitcoin protocol that it doesn’t agree with. For instance, Bitmain could have flipped a switch and shut down the entire facility in Ordos if the company found itself in disagreement with the other shareholders.

Wu claims that Antbleed, which has since been patched, was only vestigial code left in by mistake when engineers were trying to build a kill switch for a customer’s own use. There was some skepticism about this explanation, but because the S9’s firmware is open source, users are confident in the patched version. Still, the discovery of it was a startling reminder of the need for diversity in the mining hardware industry.

“Hardware vendors have significant control over Bitcoin,” says Peter Todd, a Bitcoin core developer and applied-cryptography consultant. “A competent backdoor could be extremely difficult to detect and [could] act as a kill switch for hashing power, allowing the network to be killed outright or putting Bitcoin under the control of a single actor.”

Sitting in his Beijing office this July, Wu seemed to think there was enough competition, or at least enough of a threat of competition, to keep Bitmain honest.

“In any specific area, there will be only one player or two. That’s the nature of the ASIC business. If it’s not us, it might be AMD [Advanced Micro Devices]. It might be Nvidia. It might be Intel. It might be someone else,” says Wu. “And if we are doing something wrong, we could be replaced.”