The founder and CEO of Zerocoin Electric Company, a company that supplements privacy-focused cryptocurrency Zcash, Zooko Wilcox, has protested that Chinese miners informed him that they had received Bitmain mining apparatus caked with dust, suggesting prior use. Bitmain is the world’s largest cryptocurrency mining machine manufacturer.
Zooko Wilcox said:
“Someone privately sent me these allegations (in Chinese) that Bitmain sold some miners as new that arrived caked with dust, along with Bitmain’s response. The communication gap between the West and China makes it hard to disentangle.”
A group of miners wrote on QQ that they received B3 Miners from Bitmain with lesser computing skills. They can’t mine cryptocurrencies at a rate comparable to earlier batches.
QQ is one of China’s most-used social media platforms. The group posted a picture of a B3 Miner filled with dust and maintained that the mining tools were in use before it was distributed to the clients.
Bitmain, on the other hand, acknowledged that the units had been accredited internally before shipment and had found around 100 ASIC miners with minor defects. Besides, Bitmain stressed it was a minor issue bearing in mind it ships 10,000 units per batch. Of the distributed mining equipment, 1% was affected.
In a statement translated from Chinese, Bitmain said:
“Among the complainants, some are refunded and after an investigation, it was revealed that some are still underpowered and some are repaired. Some media outlets claimed that a few hundred people have received mining equipment that are poorly functioning. This is not the case.”
Indeed, it’s not possible to design every ASIC miner perfectly. Errors arise along the way, said the Bitmain team. The firm stressed that miners who receive underperforming units will be refunded. In recent days, it had compensated miners who received faulty B3 Miners.
“Any product can be imperfect, and there will be shortcomings in the process of enterprise development. We have also compensated the miners who have received mining equipment with inadequate computing power and the mining equipment is now being run properly. We are not offering empty cheques. There must be a process. For miners with insufficient power, there are relevant compensation policies. We have been negotiating this compensation policy,” the company said.
Miner compensation from Bitmain
Bitmain valuation is about $5 to $10 billion. The multi-billion company has installed a large-scale investment firm targeting blockchain projects, tokens, ICOs, and cryptocurrency businesses.
In recent days, Circle, a US-based cryptocurrency, and blockchain company received $110million from Bitmain. The amount was used to launch its stable coin.
In an interview, Jihan Wu, founder of Bitmain said that the company forecasts a future with private central banks, without the dominance of government-backed institutions.
The Bitmain founder added:
“It’s a very important enabler for a private central bank. Currencies can do good or bad things, so we need a certain framework to limit money laundering risks. If we have an open platform we can limit the potential for negative things.”
Bitmain is likely not to risk its status. To save thousands of dollars, it will compensate miners. The company has grown into a prime cryptocurrency alongside departments and sections.
If more difficulties arise in future, the company is committed to compensating miners. But, it will partner with the internal department to improve its compensation policy.