It is no secret that the bitcoin mining industry is being battle-tested in the wake of the fourth halving. Hash price (revenue per terrahash) has reached historic lows as bitcoin’s block subsidy has been slashed. Meanwhile, the post-halving mempool frenzy has waned, adding fuel to the fire on already strained mining operators.

Nangeng Zhang, Founder and CEO of Singapore-based Canaan Inc, the creator of the first bitcoin mining application-specific integrated circuit (ASIC), sat down with Bitcoin Magazine for the firm’s first-ever interview with a North American media outlet to weigh in on the state of the industry. Zhang commented on the origins of bitcoin mining and offered his perspective on the landscape for chip design as well as trends in environmental sustainability.

Zhang also identified burgeoning opportunities for Bitcoin in the Middle East, as well as the convergence between the bitcoin and artificial intelligence (AI) industries.

Listen to the full audio interview featuring Canaan CEO Nangeng Zhang on the Bitcoin Magazine Podcast. Click here to tune in.

The Open Source Core of Bitcoin Mining

Canaan, founded in 2013, revolutionized mining with the launch of its first AvalonMiner ASIC machine – marking a turning point in computational efficiency for those securing the Bitcoin network. As the industry moved away from traditional GPU and CPU-based hashing, the embracing and commodification of specialized ASIC hardware saw commercial-scale mining operations begin to take shape.

This step-change by Canaan did not occur in a vacuum, but led to the ubiquitous proliferation of ASIC-based hashing after the firm open sourced both its Avalon hardware and management software. Zhang noted that this embrace of the open source movement in the early days of bitcoin was “not a decision” but rather “a requirement for anyone who wants to get involved in the blockchain community” and a means “to decentralize computing power all over the world.”

“The best way to defend against [51% attacks], was to rapidly distribute ASIC-based computing to users worldwide”. In Zhang’s estimation, the risk of a 51% attack has greatly diminished due to the democratization and wide-scale deployment of ASICs. The open source nature of Canaan’s chip design has since led major firms including China-based Bitmain and computing stalwart Intel to create their own ASIC machines.

Running (Bitcoin) Up Against Moore’s Law: Trends In Chip Efficiency

Canaan, as a designer of ASIC chips, has been a beneficiary of the boom in semiconductor manufacturing over the past decade-plus. At the heart of this progress lies Moore’s Law – an observation that computational efficiency has approximately doubled every 2 years. Today, firms including Taiwan Semiconductor (TSMC), Samsung (SSLF), and Semiconductor Manufacturing International Corporation (SMIC) are ramping up towards 3 nanometer chip production in this quest for optimization.

However, the move toward smaller and…

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