Bitcoin: The Marriage of Energy and Technology
The New York Times called it “the world's most valuable Bitcoin company.”
It produces the actual hardware that's being used to mine Bitcoin and other cryptocurrencies.
But outside of a small group of industry insiders and cryptocurrency nerds, this company is still very much unknown to the general public.
It's a Chinese-based tech firm called Bitmain. Bitmain develops and markets the cryptocurrency mining hardware used to produce the money. The company's products are essentially consumer-grade digital printing presses. Along with energy, these are essentially what make the cryptocurrency.
And in cryptocurrency mining, the name of the game is energy. Cryptocurrencies are fundamentally energy-based — the offspring of the marriage between energy and technology. All types of legitimate currencies are fundamentally energy-based. Money is invested labor, and labor of any kind requires energy.
Bitmain's success has been the development of the most energy-efficient crypto-miners, which means more for less. Among the company's most popular products is the Antminer series of miners. Seen below Bitmain's most updated Antminer S9, which it claims is the most power-efficient and highest ROI Bitcoin miner on the consumer market.
Companies like Bitmain that produce these digital printing presses have blue-sky potential in the cryptocurrency revolution.
Bitcoin and other cryptocurrencies have successfully positioned themselves as legitimate forms of money. They have strong theoretical roots in the decentralization of money, but only today has technology been able to put theory into practice.
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Bitcoin is money. And ask yourself this...
What is the demand for money?
So, owning the means of production for a consumer-grade product that creates money puts companies like Bitmain in an unbelievably strong position.
There are a few other consumer-grade Bitcoin mining hardware providers, including Canaan Creative and Spondoolies-Tech. But there are no publicly traded companies that focus specifically on producing Bitcoin mining hardware.
But if we look a little deeper, we might find what we're looking for...
You see, the most important feature to the mining hardware is the semiconductor chips inside.
Bitcoin miners use what are called application-specific integrated circuit (ASIC) chips.
Key ASIC chip manufacturers currently include large firms like Analog Devices, Inc. (NASDAQ: ADI), Maxim Integrated Products, Inc. (NASDAQ: MXIM), and Qualcomm Inc. (NASDAQ: QCOM).
Now, of course, all of these companies manufacture and market a multitude of other products for various industries. But any hand in the ASIC chip market for Bitcoin and cryptocurrency mining equipment is a good hand to hold right now. Because, again, we're talking about creating something with infinite demand: money.
We will continue to be on the lookout for companies emerging in the ASIC chip market. So stay tuned.
Until next time,
As an editor at Energy and Capital, Luke’s analysis and market research reach hundreds of thousands of investors every day. Luke is also a contributing editor of Angel Publishing’s Bull and Bust Report newsletter. There, he helps investors in leveraging the future supply-demand imbalance that he believes could be key to a cyclical upswing in the hard asset markets. For more on Luke, go to his editor’s page.
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