The Evolution of Bitcoin Mining with NG Zhang SLP742

**Stephan Livera** (0:00)
Hi, everyone, welcome back to Stephan Livera Podcast. Today, we've got a special one.
My guest today rarely does podcast interviews. NG Zhang is the founder, chairman and CEO of Canaan Inc, the company behind the world's first Bitcoin ASIC mining machines, the Avalon series, shipped in 2013 NG Zhang has a background in electronic engineering and software from Beihang University. NG, thank you for joining me today. And let's, you know, I think it would be great to start a bit of a background on yourself and tell us what was it like in the early days of Bitcoin ASIC machines?

**NG Zhang** (0:37)
I'm very happy to join the interview. Yeah, I think I came into Bitcoin business. I think at the very beginning, it's a hobby, it's not a business. It started in 2011 I read some very short news about someone invited a product currency, and very little technical information, but it really attracted me from that time. And maybe I spent about one week to set up my own family mining farm at the time. Yeah. And then I think the community at that time is really very, very, very good. It's fantastic.
And back to that time, I sell some small electronic products on the Internet.
So, you know, back to like 10 or 10 or something years, it's really hard to sell goods over the overseas. So we use Bitcoins to do training at that time. So at first, I'm not a miner, I'm a user of the crop currency. Very, very, very early stage. And then I think I can do something for the community at that time. So I think at late 2012, I decide to start the Avalon project. It's a project to try to design, manufacture ASIC-based Bitcoin miner. So I think in late September, we start the project. And after four and a half months, our first generation of Bitcoin mining machine, because Avalon 1 shipped to our first customer.
I can remember our first customer is GIF BASIC. It's a core developer at that time. I think it's really very important because when I get the first box of the ASIC chips, the computing power is equal to about half of the entire Bitcoin network at the time. So it's really unbelievable. Yeah, and you can do solo mining, use only one machine and two or three blocks a day.
That's an early time.

**Stephan Livera** (3:35)
Yeah, and as I understand, at that time, there was transitioning from, there was this transition. In the early days, it was CPU mining, then it was GPU mining, and then it was FPGA, and then after FPGA was the ASIC machine. So do you want to just talk to us a little bit about the insight there of transitioning from FPGA to an ASIC?

**NG Zhang** (3:55)
Oh, sure.
I think early days, we use, I think in the very early days, we use CPU mining, and then we have the CPU, GPU miner, the CG miner, and then you can use GPU instead of CPU. It's a 10x of the acceleration.
And because I study in college, so I have the skill to build FPGA boards for mining. I think the FPGA mining is lower the power consumption, maybe 5x or 10x at that time, but the performance is the same, and also have a higher cost. So, but if an algorithm is very easy to be implemented in FPGA, that then it means it will be perfect, a real ASIC. So I think the FPGA period is really short. It's about maybe one year or two years at most. Then we start to convert to the ASIC technology. I think at the very beginning, it's all about the time to market. You know, from an idea, then you need to assemble your team to build an ASIC. And it's only weeks left for you to do that. At the same time, you need to find every electronic components, the cases, you need to see everything, and find a factory to help you to manufacture them, or you need to handle it by yourself. Yeah, I think a very significant percentage of the machines is assembled by ourselves. So yeah, and ship them to your customer. You have no channels, you have nothing knowledge about how to trade overseas.
I'm only a student at that time. So every time I remember that, that maybe three months, it's really extremely busy, only three or four hours for a day to sleep, but it's really the most interesting time in my entire life.

**Stephan Livera** (6:22)
So let's bring it forward now to the modern era of ASICS. I know you have the Canaan Avalon A16 series. So can you talk us through a little bit on this A16 series, how it compares to prior generations, and maybe just comment a little bit on the joules per tera hash efficiency?