- Jihan Wu, a 36-year-old billionaire, cofounded a crypto finance firm and bitcoin mining chip giant.
- Wu told Insider how he made his fortune in crypto and his thoughts on bitcoin mining today.
- He also shared why he’s bullish on the future of DAOs and plans to become an enabler of them.
Jihan Wu needs no introduction in cryptoland.
The 36-year-old crypto billionaire, who is widely known as the cofounder of the world’s largest bitcoin mining chip manufacturer Bitmain Technologies, now heads up the crypto finance firm Matrixport, which achieved unicorn status just two years after it launched in Singapore in 2019.
But Wu’s claim to fame extends far beyond his entrepreneurial pursuits. A native of China, he is said to be the first person to translate Satoshi Nakamoto’s whitepaper on bitcoin to Chinese in 2011. He is also credited with setting up China’s first online bitcoin community site “Babite.”
Yet, unlike many crypto enthusiasts who went down the rabbit hole after reading the famous whitepaper, Wu attributes his bullish sentiment to reading books about monetary history and hanging out on online forums such as Bitcointalk.org.
From those experiences, he realized that people have gotten so used to the idea of a government-backed currency that they think any currency that’s not backed by the government will not function.
“Fortunately, I read lots of monetary history books at university when I was really interested in the subject, so I knew that it happened again and again in history,” he said, referring to the invention of private money.
In essence, he sees bitcoin as a form of private money that is enabled by public internet technology, which allows like-minded people from all over the world to discuss the idea and take action about it.
“I still remember in 2011 when I registered for the bitcoin forum, there were only tens of thousands of users. In China, we had a population of 1.4 billion, but the Chinese participants in the bitcoin community were fewer than 100,” Wu said. “It was a very active community. There were lots of posts discussing various aspects of bitcoin. People were starting to trade bitcoin and raising funds to support mining activities.”
Bitcoin mining — then and now
Enthralled by the “fantastic beginning of bitcoin,” Wu decided to drop his studies to become a certified public accountant. To amass as much of the cryptocurrency as possible, he embarked on the difficult endeavor of raising funds from friends and family.
“It’s really hard to convince them,” he said, jokingly adding that the three sources of funding were the three Fs— friends, family, and fools. “Basically, they are trusting you, your business, your connections, and the person you are.”
In mid-2011, Wu managed to raise enough money to buy 900 bitcoin. However, simply “hodling” the digital currency did not generate enough excitement for him.
Soon, he began to invest in bitcoin mining startups and at one point became the largest private investor in ASICMiner, a provider of application-specific integrated circuit bitcoin mining rigs. The company used to account for over 50% of the bitcoin hash rate and generated investment returns as high as 1,000 times, he said.
At the time, bitcoin mining was so lucrative that every block could produce 25 to 50 bitcoin, he said.
Ultimately, the profits from investing in ASICMiner allowed Wu to start Bitmain Technologies with Micree Zhan in 2013. By 2018, the company had grown into the world’s largest computer chip company for bitcoin mining, with a 75% market share, according to Forbes Asia, citing Frost & Sullivan.
As the company grew, Wu and Zhan began to disagree over its strategic direction. In 2019, Wu stepped down as co-CEO and officially exited Bitmain last year. Wu, who still retains a small stake in the firm, declined to comment further on the Bitmain deal.
Though bitcoin mining minted Wu’s fortune, the sector today has become a lot more “traditional” compared to the rest of the crypto market. From his perspective, the sector is now largely comprised of cash-flowing companies that actively invest their capital into new innovation initiatives in the blockchain space.
However traditional bitcoin mining may seem like today, the highly energy-intensive practice has continued to generate controversies. Because bitcoin’s
governments have cracked down on bitcoin mining operations to reduce electricity waste.consensus mechanism requires sophisticated gear powered by a lot of electricity to create more bitcoin, some
Of course, Wu believes that the value generated by proof-of-work mining is worth much more than the electricity used in the process. He adds that lots of mining equipment today are running on hydropower, wind power, solar and other forms of renewable energy.
Crypto finance for crypto natives
Today, Wu is still the chairman of Bitdeer Technologies, a mining platform that spun off from Bitmain and plans to list on the Nasdaq via a $4 billion SPAC merger.
He also heads up the crypto finance firm Matrixport, which achieved unicorn status after closing its $100 million series C funding round in August 2021. It now has over $10 billion under custody, of which $4 billion is actively managed.
The Singapore-based company offers a wide array of products including institutional custody, trading, lending, derivatives, yield, and asset management products, which cater to crypto-native investors and institutions that are reluctant to leave the crypto ecosystem for such services.
“If you are going to hold crypto assets forever, then you are going to need asset management,” he said. “Inherently, the market will go up and down, so you want to seek alpha opportunities in this kind of volatile market. It will require lots of more sophisticated services than before so we decided to build such a platform to serve our customers.”
It remains to be seen whether Wu’s firms will be able to emerge unscathed from what seems like another crypto winter as major token prices fall across the board. For now, the serial entrepreneur thinks that the market is healthy.
“Lots of unnecessary copycats in different niche markets are dying,” he said. “Maybe one year from now, we will see what the real innovations are because they are still going to be there.”
An ‘enabler’ of DAOs
In his view, one real innovation that’s built to last is the rise of decentralized autonomous organizations, which refer to entities powered and ruled by smart contracts as opposed to centralized authorities. As of May 5, there were $9.7 billion in assets locked in DAO treasuries, according to DeepDAO.
He pointed to the US startup Rain’s recent $6 million seed round to launch corporate credit card services for DAOs as a bullish catalyst.
“We are seeing this kind of infrastructure being built around DAOs,” he said. “The DAOs will be the vertical helping blockchain to have a much stronger impact in the real world.”
Wu said he envisions DAOs operating companies, running sports clubs, building museums, and managing movie theaters. While he does not plan to personally start a DAO anytime soon, he is open to the idea of being an “enabler” of DAOs in the future.
“We are very interested in DAOs,” he said. “I think we will most likely help DAOs get access to investors or help our investors and clients understand more about DAOs and do the investments there.”