The Controversy over the Control of Bitland: the Break between Market School and Technology School

Although Bitcontinent claims to be the first in comprehensive strength in the mining circle industry, it is still difficult to predict whether the dispute over control rights within Bitcontinent can maintain its market position. The power struggle drama of the two founders of bit continental, the world's largest mining machine manufacturer, is being fully opened.

10 year 10 On October 29th, Wu, the founder of Bitland, suddenly challenged another founder, the Warrior Regiment, trying to completely drive the Warrior Regiment out of Bitland through a series of measures.

According to industrial and commercial data, on June 28th, 10, the legal representative and executive director of Beijing Bitcontinental Technology Co., Ltd. was changed from Zhan Ketuan to Wu, and Ge, who followed Wu for many years, became the new supervisor.

Dramatically, at this time, Zhan Ketuan was participating in the 20 19 Shenzhen Gong Bo Expo, and released the latest version of AI server before the opening of the Expo, and entered the field of intelligent video image analysis ambitiously. When the Jenks heard that they were going to be dismissed, they hurried back to Beijing. It was too late. The right to enter the company has been closed.

In the face of Wu's sudden "forced palace", Janke Group was obviously unprepared. To this end, after more than ten days of silence, the Warrior Corps finally issued an open letter on165438+1October 7 to respond. He claimed that he knew nothing before the incident, but he would return to the company as soon as possible through legal channels to end this extraordinary period and restore the normal order of the company.

"The direct cause of Wu's strong return is the confusion in the management of the exhibition group." Liang Qiyuan, a former executive of Bitland who is quite familiar with Wu and Zhan Ketuan, told China. At the beginning of 20 18, Zhan Ketuan found the HR director with Huawei background, thoroughly reformed the organizational system of Bitland, and made R&D personnel do HR, sales and finance with reference to Huawei's organizational structure.

In September this year, the Jenk Group once again started a new round of enterprise management structure adjustment, and many old employees in Bitland were forced to leave.

Janke group.

Just as the two founders were busy fighting for control, Jian 'an Yun Zhi, the world's second largest bitcoin miner, submitted a prospectus to the US Securities and Exchange Commission (SEC) on 10/October 28th, intending to raise $400 million.

In the mining machine market, the sales performance of Shenma mining machine is better than that of Ant Mining Machine this year, and the mining pool has been surpassed by Poolin and F2Pool.

Although Bitcontinent claims to be the first in comprehensive strength in the mining circle industry, it is still difficult to predict whether the dispute over control rights within Bitcontinent can maintain its market position.

The whole story of "coup"

191On October 27th, Zhan Ketuan, chairman of Bitland, personally led a delegation to Shenzhen to attend the 20 19 Shenzhen Expo. What Jencks and his wife didn't expect was that a "coup" against him was brewing 2000 kilometers away.

The timing of Wu's attack on Yang Ketuan was very clever. At noon on October 29th, 65438/kloc-0, Wu, as the founder of Bitcontinent, chairman of the board of directors of Bitcontinent Group, legal representative and executive director of Beijing Bitcontinent Technology Co., Ltd., sent the first email to all employees, announcing the dismissal of all the positions of Zhan Ketuan in Bitcontinent with immediate effect.

In addition, Wu also said in the email of all employees that any employee in Bitland shall not carry out the orders of edin dzeko Group or attend the meetings convened by edin dzeko Group. In case of violation, the company will consider dissolving the labor contract according to the seriousness of the case; If damage is caused to the company's economic interests, the company will pursue civil or criminal responsibilities according to law.

Then, Wu sent out the second e-mail that raided all employees of edin dzeko Group, the content of which was to dismiss the current human resources director, re-appoint the former human resources director, and announce a staff meeting. According to Liang Qiyuan, a former executive of Bitland, the person who was dismissed was dug from Huawei, and Suo Chao, who was re-appointed as the head of HR, was a veteran employee who had started a business with Wu before.

At the staff meeting held for more than an hour, Wu began to do the ideological work of all the staff. Starting from the entrepreneurial story of Bitland, he explained the strategic decisions behind the company's development one by one, and listed the "crazy behavior" of Jenk Group's decision, such as mass production of immature 10nm chips, which led to the company's loss of1500 million US dollars.

"I have to come back and save this company." Wu criticized Zhan Ketuan for his extreme lack of enterprise management ability.

A former employee of Bitland speculated that because Bitland's shareholding structure adopts VIE structure, Beijing Bitland Company is wholly owned by Hong Kong Bitland Company, and Wu probably replaced the legal representative and executive director of Beijing Bitland by virtue of the latter's position as executive director.

In this regard, the Jenk group said that it was "very embarrassing." He said that he has been immersed in technology, making products and fighting for business. He didn't know that, as the founder and largest shareholder of Bitland, the identity of its legal representative registered in government departments could be suddenly changed without knowing it.

In an open letter titled "Let's Work Together and Cross the Hard Land in Extraordinary Times", Jenk Group said with a sad metaphor, "When great changes came, I realized that the bridge that had happened countless times in film and television dramas and was once the most trustworthy partner and' brother' who struggled together would really happen."

Many people didn't expect that Wu and the Jenk group would come to this step-one was called "Bitcoin preacher" and the other was called "the richest man in the blockchain". They used to be entrepreneurial models with complementary professions among the investment population, but now they are caught in the embarrassing situation of "brothers" defecting.

Route dispute

In 2005, Wu graduated from Nankai Middle School, a key high school in Chongqing, and was admitted to Peking University University of Economics with a minor in psychology as his second major. After graduating from undergraduate course in 2009, Wu joined an investment bank as a venture capital analyst and soon became an investment manager.

20 1 1, Wu's fate changed from contact with bitcoin. Perhaps out of curiosity and love for Bitcoin, he spends almost all his pocket money on buying Bitcoin, and other colleagues in the investment bank will also let him buy Bitcoin.

It is worth noting that Ge, who followed Wu as an intern in an investment bank at that time, has been following him to Bitland. Liang Qiyuan, a former executive of Bitland, revealed that in the early days of Bitland's business, Wu and Zhan Ketuan didn't have much money. Ge Yuesheng's family invested a lot of money, and many people in the family are shareholders. Later, this investment also made Ge Yuesheng the "richest man after 90".

Also at 20 1 1, Wu met an engineer (Chang Cheng) from Guangxi Institute of Land and Resources Planning, and they jointly raised funds to set up a bitcoin information website, namely Babbitt. Today, Babbitt is one of the most famous bitcoin information websites in China. Wu's first column in Babbitt was his experience of shopping with bitcoin in China. At the end of 20 1 1, Wu translated his creative thesis, making him the earliest bitcoin disseminator in China.

20 12 In August, Jiang Xinyu, a junior student of China University of Science and Technology, who was called "roast cat" by the bitcoin world, set up a company in Shenzhen, announced the plan to manufacture ASIC mining machines, and raised funds online through a "virtual IPO" project. Issue160,000 shares at the price of 0. 1 bitcoin, and ticket buyers can get dividends.

Seeing this news, Wu bought 15000 shares of the virtual stock of the cat roasting company and became an important investor in the early days of the cat roasting machine. In 20 13, the cat roaster was a great success, but it faced fierce competition from domestic Avalon miners. At the same time, the foreign Bitfury team successfully developed a fully customized mining chip with extremely low power consumption, which made the roast cat company encounter an unprecedented crisis. This made Wu realize the importance of independent research and development of chips, so he decided to set up a mining machine factory.

However, Wu, who was born in economics and psychology, doesn't understand technology. He needs a technical partner. Wu found the business card of Jenk Tuan from the business card album, which he received on the street in Beijing three years ago. At that time, the salesmen under edin dzeko Group took the initiative to sell their business, so edin dzeko Group entered Wu's field of vision. At that time, Wu needed a chip designer, and the first thing he thought of was the Zhan Ke Tuan. So, Wu sent his understanding of Bitcoin to the Jenk team by email.

Zhan Ketuan studied in Shandong University and Institute of Microelectronics, Chinese Academy of Sciences, and worked as a research and development engineer in Tsinghua University Institute of Information Technology. When Wu found the exhibition group, he was running a startup company called DivaIP, mainly engaged in the set-top box chip business.

"I spent two hours reading about Bitcoin on Wikipedia, and I realized that Bitcoin had development potential, so I decided to join without hesitation," Jank recalled. Finally, Jenk Group called the set-top box chip team to join Bitland.

Some differences can be seen from their study and work backgrounds. The 40-year-old Zhan Ketuan is known as the "technical brain" of Bitland and has 15 years of management and operation experience in the integrated circuit industry. It took him six months to develop the first generation mining machine of Bitcoin, which was far more energy-saving than his peers and laid the industrial foundation of Bitland.

Therefore, public opinion called Wu a "marketer" and called Yankee Group a "technologist". Earlier, it was reported that the two men had different emphases on the development of the company and both wanted to lead Bitland to a familiar direction. "Wu advocates that the company continue to develop new mining machines and continue to develop in the digital currency industry with heavy positions (bitcoin cash); The technology-born Zhan Ke Tuan hopes to transform the company into a chip manufacturing company. "

According to the insider's analysis, the infighting between the two may stem from the dispute over routes, that is, the market faction and the technology faction broke up.

(of a doctor) bring back to life

In 20 13, the price of bitcoin soared, opening a new bull market. From $25 to $260, Bitcoin rose by 10 times in less than three months. As the price fluctuation of Bitcoin intensifies, time is of the essence. Bitland must speed up the launch of products in order to seize the opportunity of profit in this bull market.

At that time, the bitcoin mining machine market was occupied by Jia Nan Yunzhi and Bitfury for a long time. With more than ten years' experience in chip research and development, Zhan Ketuan completed the product in only half a year, and led the team to achieve a number of technological breakthroughs, and independently developed the 55nm mining chip BM 1380. 20 13, 1 1, Bitland introduced the first generation of ant miners (AntMiner S 1), which was much better than that of Avalon miners with the first market share in the same period.

In the above-mentioned open letter, Zhan Ketuan recalled the hardships of research and development at that time. "I remember when developing the first generation of chips, the server overheated and crashed, and I got up in the middle of the night to turn it on; I remember that when testing the first generation of chips, I fought all night in Shenzhen; Remember to take a photo of the first S 1 mining machine; I remember that when the chip technical indicators were exhausted, the team brothers repeatedly wanted to hit the wall with their heads. "

Since then, Zhan Ketuan led the technical team to continuously upgrade the ant mining machine. In just two years, the ant mining machine has iterated from S 1 to S4.

Wu once said, "20 14, our performance has soared. The team's execution ability has always been praised. We have made four chips in two years, and we can produce mining machines in time every time the chips come out. "

In fact, after the price of Bitcoin reached a high level of 20 13, 1 1, it was already unsustainable. Then there is Mt, the world's largest trading center in Japan. Gox's fraud has become the fuse of bitcoin price plunging.

Since 20 14, Bitcoin has entered a bear market for two years. Prices plummeted, beliefs collapsed, and the influx of people began to leave quickly.

At one time, when the price of bitcoin rose rapidly, the huge profits of mining machine production made capital flood in, and entrepreneurs flooded into the market. In addition to bitcoin mining machines, Litecoin mining machines have also begun to appear. At that time, Dragon Mining Machine, Bite Garden Mining Machine, Krypton Mining Machine, Zeus Mining Machine, Whitebait Mining Machine, Western Mining Machine … dozens of mining machine manufacturers competed for each other.

Now that the market is in a long-term bear market, mining has become an uneconomical business. No one wants to spend expensive electricity to dig up a lot of digital currency whose value is declining. The computing power of the whole network is stagnant, the sales of mining machines are facing a cliff-like decline, and the major mining machine manufacturers are facing a major reshuffle, leaving only a few mining machine manufacturers such as Bitcontinent and Jian 'an Yun Zhi.

What is even more embarrassing is that the pioneer of mining machine research and development, the roast cat, suddenly disappeared on 20 15 and has not been heard from since. Some people suspect that the roast cat was murdered; Some people think that he is just hiding; Others say that he has depression and needs medication to relieve it. Various speculations are flooding the Bitcoin forum.

Bitland was almost bankrupt in the long bear market. In order to raise money, Wu sold the accumulated bitcoin to ensure the continuation of filming. At this time, Zhan Ketuan is studying Antminer S5, the fifth generation mining rig in Bitland, which reduces the power consumption by about one third compared with S 1.

"With the rising price of bitcoin, miners returned to the mine, and Antminer S5 became its mining tool. At that time, other mining machine manufacturers did not continue to invest in research and development. The fifth-generation ant mining machine S5 became the best mining machine, which suddenly brought brine back to life. " A Bitland Mining Machine Business Channel said.

Contradictory propaganda

As early as September 26th, 20 18, bit continental announced its listing in Hong Kong, thus unveiling the mystery of this mining giant.

Bitland started as a mining machine business, accounting for nearly 70% of the global mining machine market. According to the prospectus, Bitland's main sources of income are mining machine sales, mine pool combined transport, mining services and self-operated mining. With these four main businesses, Bitland's revenue and profit increased rapidly in 20 17, and reached its peak in the first half of 20 18, with an adjusted net profit of 952 million US dollars.

In terms of income, the total income of Bitland in 20 17 was $25180,000, an increase of 806.95% compared with $278 million in 20 16. In the first half of 20 17 and 20 18, the revenue of Bitland was 2.5.1700 million dollars and 2.845 billion dollars respectively. In the first half of 20 17 and 20 18, the net profit of Bitland was $70 10/00000 and $742 million respectively, and the adjusted net profit was $952 million.

From the perspective of business composition, although Bitcontinent is not limited to the blockchain field, but seeks a two-line layout in the AI field, it is still difficult to hide the reality that the company relies too much on the "mining" business. According to the prospectus, in the first half of 20 18, the sales revenue of Bitcontinent mining machinery was 2.684 billion US dollars, accounting for 94.30% of the operating income.

Because of this, the performance of Bitland is directly linked to the price of Bitcoin to a great extent, which also leads to the ultimate dream of Bitland breaking the Hong Kong Stock Exchange.

In this regard, Li Xiaojia, president of HKEx, once responded that the core principle of HKEx is listing adaptability. The implication is that the listing of Bitland does not meet the listing adaptability.

Sure enough, by the second half of 20 18, the global crypto asset market had turned to bear completely, and the price of bitcoin dropped from nearly $20,000 at the peak to less than $4,000, a drop of 80%. Wu has always supported and even invested heavily in the price. After the hard fork in June165438+1October, it was greatly reduced to less than $200.

The collapse of the encrypted asset market directly led to the bleak sales business of mining machines, and it was difficult to hide the decline in price reduction promotion. Faced with the double squeeze of industry cold winter and supervision, Bitland is facing a sharp decline in its main business. Since the fourth quarter of 20 18, there have been many negative rumors in Bitland, such as falling into huge losses, cutting off marginal business, mass layoffs, and high-level discord.

The currency price plummeted, the inventory of mining enterprises was high, the chip failed, the AI chip could not generate income, the BCH bifurcated, and the listing failed. Many problems broke out together. In the second half of 20 18, Bitland ushered in the most difficult moment. According to Liang Qiyuan, when the cash flow on the company's account is the least, it is only10 million.

"On that day, we received a phone call from the supplier asking the company to settle the accounts payable. Bank of Beijing has agreed to give us a loan amount and cut it the next day. " When talking about this matter, Wu couldn't help feeling at the staff meeting: "If the price of Bitcoin doesn't rebound in the next few months ... the company may not be able to survive last winter."

Under pressure, Bitland began to cut off marginal business and lay off employees on a large scale. Since 20 18 12, Bitcontinent has abolished unprofitable innovative businesses such as open source communities, blockchain finance, and AI robots. The team of nearly 3,000 people in Bitland has also been laid off to more than 1.700, and the layoff ratio is over 50%.

However, at the annual meeting of 20 19, the exhibition delegation answered the staff's questions about BCH. He said that all currencies should be treated objectively and neutrally in the future. Wu immediately took the stage to refute: your mining machine lost its competitiveness and was robbed of the market. Why do you blame BCH?

"The scene is extremely embarrassing and the contradictions are open." An internal employee of Bitland revealed.

Control struggle

From the beginning, Wu and Zhan Ketuan decided to follow Google's example and implement the co-CEO system. In many investors' stories, Wu and Zhan Ketuan symbolize the successful entrepreneurial model of meeting, knowing each other, complementing each other.

Using different professional backgrounds to complement each other, there are obvious differences in business. Wu is in charge of investment, mine pond, mine and mining machine sales, while Zhan Ketuan is in charge of technology, supply chain, production and AI, and human resources, finance and legal affairs report to them.

At the beginning of its establishment, Wu and Zhan Ke Tuan reached a strange gambling agreement, that is, Zhan Ke Tuan did not get paid, but when Zhan Ke Tuan developed mining machine chips, he gave the technical team 60% of the shares. With the continuous iterative updating of the ant mining machine, Jenk Group can get share incentives, and gradually Jenk Group holds more and more shares, and finally becomes the largest shareholder of Bitland.

However, Wu is very dissatisfied with the equity incentive of Zhan Ketuan. Wu admitted that he promised that every time the mining machine chip reached the standard, he would give the Janke Group team a certain share. However, at the shareholders' meeting of Bitland on June 29th, 10, Wu criticized Yankee Group for taking most of the shares for himself instead of handing them over to the team, which is why he became a major shareholder.

As the contradictions between the two sides gradually became public, Wu and Zhan Ke Tuan began to blame each other for their strategic mistakes. Zhan Ketuan attacked Wu Hanji for BCH, which caused the company to lose money; Wu attacked Janke Group and transferred technicians to AI. The mining machine lost its competitiveness and was surpassed by Shenma Chip.

Whether Wu supports it or Zhan Ketuan supports Ai. These two strategic measures are burning money, and at the same time, they have not brought any income. At the shareholders' meeting, Wu revealed that Zhan Ketuan lost $654.38+05 billion because of the continuous chip flow failure, while his investment only lost $800 million.

Take BCH as an example. After the hard bifurcation of BTC in 2065438+07, Bitland gave up the profit of digging bitcoin, invested a lot of computing power to dig BCH, and replaced many BTC quotations with BCH. In fact, the price of BCH is much lower than that of BTC. As of 20 19, 165438+ 10 month, 1 1, the price of a BCH is only 3 12.02 USD, which is less than one third of that of BTC. Obviously, Wu made a mistake in the strategic interpretation of betting.

In addition, Wu and Zhan Ketuan also have differences in AI business. Zhan Ketuan hopes to double the investment in AI business, but Wu thinks this idea is simply "crazy". After all, there is no direct business relationship with mining. Wu Shuo, Zhan Ketuan even wants Shenzhen financial personnel to sell artificial intelligence products.

Wu thinks this is simply unrealistic: "Then who will be responsible for our financial work in Shenzhen? How will we present the financial data of IPO? " He then added: "(Zhan Ketuan) still wants to recruit 300 fresh graduates? How many employees do we have now? If we recruit so many people at once, do we have enough resources to train them? "

At present, there is no conclusion about the dispute over the control of bittern. "From the current situation, Wu has great advantages. Of course, Jenk Group is not without opportunities. The key is to see who can get the support of minority shareholders and investors behind them. " Liang Qiyuan, a former executive of Bitland, analyzed.