Powerful New Ethereum Miner Reaches Final Stage Before Mass Production

After a nine-month delay and $3.8 million of investment, an upstart manufacturer is ready to produce its first batch of powerful new machines for mining cryptocurrencies ethereum and ethereum classic.

Linzhi, based in Shenzen, China, said Wednesday it had ordered 37 wafers from Taiwan Semiconductor Manufacturing Company, the main parts that will allow it to build about 200 application-specific integrated circuit (ASIC) miners.

These sample units will test whether the machines can mine as efficiently as they are designed to do using ethash, the proof-of-work algorithm used on ethereum and ethereum classic.

The testing units, if successful, would mark a major step toward mass production as Linzhi sets out to compete with makers of general-purpose computing chips, such as NIVIDA, as well as mining gear specialists Bitmain and InnoSilicon, which both make ASIC miners for the ethash algorithm.

Roughly five million ether (ETH), the native cryptocurrency on the ethereum network, is being mined every year, which, at its current price, is worth more than $800 million. Even for ethereum classic, which maintains the original ethereum ledger from before a hard fork in 2016, about nine million native ETC gets mined every year, worth more than $60 million.

Powerful chips

Linzhi was founded in February 2018 by Chen Min, a former chip design head at Canaan Creative, maker of the Avalon bitcoin miner. Chen told CoinDesk the new company was completely self-funded with about $4 million as starting capital.

It announced the plan to produce ethash ASIC miners in September 2018 with an ambition to beat the efficiency of most existing equipment. Chens target specification for Linzhis ethash ASIC miner is set at 1400 mega hashes per second (MH/s) with an electricity consumption level of one kilowatt-hour.

To put those figures in perspective, NVIDIAs GTX TitanV 8 card is now one of the most profitable piece of equipment on the ethash algorithm, able to compute 656 MH/s at an energy consumption level of 2.1 kWh, according to mining pool f2pools miner profitability index,

With ETHs current price ($180) and network difficulty, as well as an electricity cost of $0.04 per kWh, each GTX TitanV 8 would bring home a daily profit of $7.35. Similarly, if one uses the same GTX TitanV 8 card to mine ETC, which has both a lower price and a lower mining difficulty than ETH, the daily profit would still be around $6.70.

The total computing power racing on ethereum and ethereum classic to compete for block rewards and to secure the two networks is around 160 and 13 tera hashes per second (TH/s), respectively.

Plan A

Since the announcement of its plan, Linzhi has spent almost all of its initial capital on research and development of the chip design, the operations of its dozen-person team, and the order of the first batch of wafers, to bet the sample testing units will deliver the intended mining power.

Linzhi previously said it was aiming to order the first batch of wafers around December in order to have samples ready in Ap ...

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Tags: Ethereum, Miner, Mining, Nyingchi, Application-specific integrated circuit, mass production, Canaan Creative, TSMC, Shenzhen, Cryptocurrency