Sequoia and IDG to invest in China Bitcoin mining giant

HONG KONG: Sequoia Capital and IDG Capital are investing in Beijing-based Bitmain Technologies Ltd, the world’s largest Bitcoin mining organisation, according to people familiar with the matter.

Bitmain is raising US$50mil from several venture firms to boost its profile among mainstream investors, said one of the people, who asked not to be named because the matter is private.

Sequoia and the other firms also plan to provide the company with more guidance on management, the people said.

Bitmain, which produces chips and machines for mining Bitcoin and operates its own mining facilities, has benefited from the rise in the currency’s market value, now about US$75bil.

The startup told Bloomberg TV in August that its own valuation is “in the billions” and it’s weighing a possible initial public offering. Bitmain has said that it’s planning to produce chips for artificial intelligence and invest in mining facilities in the US Bitmain, Sequoia and IDG didn’t respond to email queries about the investment.

The company led by founders Wu Jihan and Micree Zhan has been at the centre of disputes over how to expand use of the cryptocurrency.

Operating the largest mining collective – a network of computers that verify transactions made on the Bitcoin distributed ledger – Wu has championed the idea of increasing block sizes of the network that were previously capped at one megabyte to enable faster transactions.

Opponents have criticised the proposals for giving miners too much power and came up with alternative proposals.

A split occurred within the community in August, causing Bitcoin to become two currencies-- the original Bitcoin and an offshoot called Bitcoin Cash.