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MicroBT, a mining gear company created by Yang Zuoxing, a former chip designer at Bitmain, is looking to take on the crypto mining giant by offering better quality rigs at a competitive price, Bloomberg reported on October 8.

Bitmain’s Former Chip Designer Takes on The Crypto’s Mining Giant

Yang Zuoxing, the former chip designer at Bitmain, is the founder and CEO of a new mining gear startup that plans on taking on the most significant player in the game – Bitmain.

Located a short drive from the prestigious Tsinghua University in Beijing, Yang’s startup is just two years old. Despite the company being so young, it’s currently fighting an uphill battle against Bitmain Technologies – Yang’s former employer and the world’s most dominant provider of crypto mining chips.

According to Bloomberg, Yang says he helped Bitmain design its market-leading technology but left the company in June 2016 after co-founders Jihan Wu and Micree Zhan turned down his request for a stake in the business. After Yang left the company to start MicroBT in 2016, Bitmain unsuccessfully sued him over patent rights.

The 45-year-old engineer told Bloomberg that his firm’s mining gear is just as good, if not better than Bitmain’s, saying that MicroBT now competes with Bitmain “in every area.” MicroBT has raised around $22 million from individual investors and is in talks with institutional money managers in China for additional funding, Yang said.

In light of its highly successful fundraiser, the company is also considering filing for an IPO next year. If MicroBT were to go public, they would race to tap public equity markets that also includes Chinese rivals Canaan Inc. and Ebang International Holdings Inc.

Challenging Bitmain’s Dominance in the Market

Seeing how, according to Bloomberg, Frost & Sullivan predicted that the market for specialized crypto mining chips would grow more than fivefold to $17 billion by 2022, it’s no wonder the number of companies looking to take on Bitmain is increasing each day.

Bitmain controls an estimated three-quarters of the market in 2017, but analysts including Mark Li of Sanford C. Bernstein have said that the company may be losing its technological edge. MicroBT has already started taking a significant share of the market, earning $48 million on $186 million in sales.

And while the company’s sales can’t compare to those of Bitmain, which had a profit of $743 million and sales of $2.8 billion in the first half of 2018, it has an unexpected advantage that could attract more investors.

MicroBT doesn’t have any exposure to bitcoin cash, whose value has tumbled about 60 percent in 2018 alone. Bitmain, one of the biggest holders of bitcoin cash, disclosed a $103 million impairment of its crypto assets and took a $253 million write-down on unsold inventory in the first half of 2018.