Bitcoin company Blockstream announced plans to start manufacturing bitcoin ASIC miners. Blockstream therefore took over the intellectual property and core team of mining manufacturer Spondoolies. In the third quarter of 2022, Blockstream hopes to enter the ASIC market. According to them, this is desirable for the decentralization of mining equipment manufacturers.

Blockstream recently raised $210 million in a funding round to expand the company’s mining business, it said in a press release. With the money, Blockstream has acquired, among other things, the intellectual property and core team of the Israeli mining manufacturer Spondoolies. With that, Blockstream is setting up a new branch of the company called Blockstream Mining Division .

Enterprise ASICS

The Blockstream Mining Division will focus on the production of specialized mining equipment, so-called ASICs (application-specific integrated circuits) . Spondoolies has experience with this since 2013 and it previously released mining equipment in the SP miner series. Using Spondoolies’ expertise, Blockstream aims to target the professional equipment market.

Spondoolies has also excelled at this in the past, Blockstream’s Chief Strategical Officer Samson Mow says during an interview with The Investor’s Podcast. For example , Spondoolies was the first to design their mining equipment based on the 1U form factor, a standardized size that is used in data centers, among other places.

“I think we want to continue in that direction and we want to focus on ‘enterprise grade’ hardware,” explained Mow, “It’s just easier to manage and I think we can take advantage of that because you can standardize a lot more if you standardize the shape then you can replace the chips more easily when they burn out or no longer fit and just replace the parts you need to replace I think a lot of miners are designed to be replaced after they become obsolete , and I think we want to minimize and optimize waste for efficiency.”

Decentralization of mining manufacturers

It’s also desirable for decentralization among mining manufacturers, says CEO Adam Back: “A lot of manufacturing is China-based, so it’s good to have some geographic diversity in terms of where things are made . ” Due to the current high concentration of manufacturers in China, the Chinese government could theoretically thwart the production of mining equipment.

“That’s kind of a risk to the Bitcoin network ,” agrees Mow, “Having Spondoolies on Blockstream helps us decentralize bitcoin miner production . ” If they can grow as they plan, he thinks they can steal a significant market share from the other producers.

Q3 2022

The first ASICs are scheduled to hit the market in the third quarter of 2022. That will be unexpectedly fast for some, thinks Back. “We’ve actually been working on it behind the scenes for years,” he explains. Now that there are also shortages of mining equipment, he believes it is a good time to enter the market.

Block stream

Blockstream has been one of the best-known and most influential Bitcoin companies for years. It was founded in 2014 by some Bitcoin community leaders. The company is led by renowned cryptographer Adam Back, who once designed a precursor to Bitcoin (Hashcash) and was one of the first to be involved in Bitcoin. Blockstream also employs several other leading Bitcoin Core developers.

Over time, Blockstream made significant contributions to Bitcoin’s development in terms of the Lightning Network and Segwit, and it launched the Liquid side-chain. The company created several wallets, such as Blockstream Green and Jade, launched a Bitcoin satellite network and is involved in the development of a computer game that integrates Bitcoin.

It is also working on a solar-powered mining facility and modular mining equipment. Blockstream also develops financial products based on bitcoin.

After the most recent funding round, Blockstream’s market capitalization is around $3.2 billion.

Also read our previous articles about Blockstream, such as about the Blockstream satellite network, the Blockstream Green Wallet or the Bitcoingame Infinite Fleet.