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A draft prospectus offers an inside look at Bitmain’s bitcoin mining empire

With a public listing imminent, yesterday Bitmain published a draft prospectus that provides an inside look at the company’s bitcoin mining empire. It allows interested investors to have a clear picture of how profitable the mining hardware manufacturer is and how it’s investing for growth in the future. The prospectus is 438 pages long and includes details about Bitmain’s profitability going back to the company’s inception in 2015. It also breaks down the revenues the company takes from different lines of business. The document also includes a picture of the company’s costs which is significant as it illustrates how much the firm is investing in growth and shows how unpredictable returns in such a field can be due to the volatile nature of cryptocurrency prices. According to the document, the company enjoys a 75 percent share of the global market when it comes to crypto mining equipment. The statements show how lucrative this can be. In 2015 the company had revenue of $137.3 million. A figure that saw a 328 percent growth in 2017 to reach $2.5 billion in 2017. It has something to do with the crypto boom witnessed last year. At $2.8 billion already, this year’s figures have already surpassed 2017 numbers. Profits have also grown in the past few years. From $48.6 million in 2015 to $952.6 million in 2017. 2018 has also seen profits of $952.2 million. The document also breaks down the different revenue channels that the company has with the bulk of Bitmain’s sales coming from selling mining hardware. Other streams of revenue include mining pool service and proprietary mining. Analyzing the profit numbers posted by the company something stands out; profit growth is diminishing compared to revenue. It means either the company is reinvesting the money in the business or it’s facing higher costs. The answer turns out to be a bit of both. The largest increase in expenditure is coming from manufacturing costs and cost of materials. “The costs represent our payment to our production partners for the fabrication and the packaging and testing of our ASIC chips.” One thing is clear; the company is ramping production fast given that there is a steep rise in costs from $93.7 million in 2017 to $1.5 billion in the first half of 2018. What’s your take on the numbers posted by Bitmain on its bitcoin mining empire? Share your thoughts in the comment section below.

Basil has three years of freelance experience writing on disruptive technologies. He focuses on breaking news and education pieces; helping to spread the gospel of Blockchain. He hopes to have his own blockchain company one day; helping the world through its innovative ledger technology.

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