If your involved in someway in the Bitcoin mining space you’ve undoubtedly heard of the potential competitor for Bitmain, Halong Mining. We published an article just a couple weeks ago comparing the promised Dragonminer T1 from Halong Mining and Bitmains Antminer S9.
Although it seemed the concerns over whether these new miners from Halong were a scam appeared to be somewhat diminished they have once again began to circulate as pre-order participants get more and more inpatient for delivery.
Just yesterday we saw an article from the co-owner of Bitcoin.org and Bitcointalk.org Cøbra publish a post over on Medium entitled ‘I think Halong Mining is a scam’
The post is purely based on lack of information regarding Halong Minings authenticity rather than evidence that the operation is a scam, however that said it raised some legitimate questions.
We can dismiss some of Cøbra’s points as they do not really strengthen the case that these miners are a scam:
I am convinced beyond reasonable doubt that the entities behind this elaborate scam have taken advantage of fears of BITMAIN’s monopoly of Bitcoin mining and through clever manipulation of social media and with some help from popular Bitcoin twitter personalities, one of which is the CEO of Blockstream (likely unknowingly a party to this scam), they have swindled millions of dollars worth of Bitcoin from thousands of customers.
This type of activity is just as likely to apply regardless of whether ot not the product is a scam, it’s called marketing and if I were to be marketing a new SHA256 ASIC miner this is likely how I would direct my marketing.
Preorders. No refund policy. And worst of all, the company essentially… did not exist… anywhere.
This again is not something which is specific to scams, Bitman their Company with this same policy and continue to work by this policy to this day.
Cause For Concern
So the first major issue raised which should give cause for concern is regarding the Company itself:
Nobody (even still) can name the CEO, or say where they’re incorporated, or where are there offices? Who are they? You know more about your local barber shop than you know about Halong Mining.
When spending a large amount of money on a product that has never been seen before, produced by a company which has never delivered a product to date you would likely be wanting to research those behind the operation, take a look at the CEO and founders of the Company. The problem is, you can’t – in fact there is no known entity to attach to Halong Mining, there are no details whatsoever about the Company on the website. Although this is not evidence in itself that the Dragonminers are a scam as such vague details are not uncommon in China’s manufacturing industry. Bitmain were a little sketchy in their early days also, though Jihan Wu has always been publicly stated as the CEO, which is more than can be said for Halong Mining, no CEO, no Founders – in fact a quick Google search will turn up virtually nothing about the Company except media articles on their forthcoming products.
Halong Mining do address this issue on their website, however I don’t believe their reasons justify total anonymity and secrecy:
All our strengths aside, we recognise that success in this field is an uphill battle and the game is extremely competitive. Because of the time taken to design new technology and bring it to market, time advantage is a key strategy in order to gain a foothold against formidable competition. For this reason we will defer publishing board designs or software (either directly or through partner channels), until the first batch of miners is near ready for shipping. Because we have considerable costs to recoup, particular details of our process will also not be made available until closer to shipping of the first batches, to give us a better chance of succeeding and being able to drive forward with innovation into the future.
Where’s My ASIC?
Another issue which Cøbra skims over is the ever changing Delivery times. The first batch of preorders promised for delivery in March 2018 but with no verified confirmation of any being delivered, also the delivery of the first batch has already been pushed back from it’s initial statement at the time of the first batch pre-orders.
With April quickly approaching this delivery promise about to be broken. This wouldn’t confirm that the operation was a scam, but it would increase the scepticism about the legitimacy of Halong Mining, and rightfully so. Customers waiting on Twitter have already began to get a little nervous:
Other concerns raised is the Website quality, lack of product specification details, multiple other miners for various other algorithms on the website which also have yet to be seen by any customers.
While all the above mentioned concerns are valid and for anyone who spent $1300 on the first batch late last year I think the state of their patience and nerves is justified, however none of the above proves this is a scam, nor are Halong Mining doing anything wrong.
From reading Cøbra‘s article on Medium you maybe thinking that all we’ve seen from the Company is a website with a pre-order, however this isn’t true.
AsicBoost Patent Technology
The Dragonmint T1 uses ‘Overt’ AsicBoost Technology, we won’t go into the details behind how AsicBoost works in this article, however to put it simply it can increase mining efficiency by up to 20%. The technology is Patented and the license holder is Little Dragon Technology LLC, Dragonmint (claim) to of been in talks with the patent holder and it has been agreed that the AsicBoost patent will be opened up for usage by anyone under a the Blockchain Defensive Patent License as of 1st March 2018:
After Little Dragon Technology LLC acquired the patent from the original inventors, we negotiated a license to use AsicBoost in our miners on the understanding that AsicBoost would be opened up to everyone to use, under some form of defensive patent license, in the hopes it can help protect decentralization of Bitcoin mining. Whilst this was being arranged, we were unable to announce our intended use of AsicBoost technology until the patent holder fully opened the patent for all to use under defensive licensing terms which occurred on 1st March 2018. This explains our strict embargo on releasing machines into the wild.
This development is backed up by Little Dragon Technology on their website:
We are announcing today, that we committing to the Blockchain Defensive Patent License, meaning the AsicBoost patent will be available under these terms once the PCT patent has been granted.
On it’s own this could all quite easily be all part of an attempt to bolster the validity of an elaborate scam as no we cannot confirm whether or not Little Dragon Technology have in face been in talks with Halong Mining and if they have it doesn’t prove a product exists, or will exist. However there is more.
Adam Back Confirms Existence
Bitcoin Developer Adam Back tweeted back in November that he has seen these miners and shows his excitement for the new Company:
Prior to this tweet Adam made this tweet, which was later taken down:
The Slush Connection
This as you’d expect raised a few questions around the validity of Adam’s second tweet on the subject, however it’s worth noting that Slush does not deny seeing the machines in action, they are merely unassociating themselves with Halong Mining. This more recent Tweet which was a response to Cobras recent article which we analysed earlier in the article:
Over the next few days and weeks it will become quickly apparent whether or not these new miners are indeed a scam and we will update this article appropriately as more details come in, however for those who did take part in the pre-order I wouldn’t loose hope just yet. Though looking at the entire operation through nervous, panicky and financially poorer eyes can easily lead you down the road of scam, it doesn’t by any means mean that it is. I purchased one of Bitmains first ASIC’s and their operation at the time was run purely from the Bitcointalk.org forum, after weeks of assuming i’d been duped, they turned up and all was good.
It would probably be prudent for those wanting to get their hands on these to hold of on ordering until at least the first batch have turned up, though it’s worth noting that as soon as the first batch delivery is confirmed the next batch will sell out within minutes.
The following tweet has recently surfaced from what we are led to believe is a Halong Mining customer:
Whether or not the Tweet is genuine has yet to be confirmed and over the next few days we would expect more of these tweets to come in, if these miners are genuinely being received by customers that is – we’ll keep you posted.
Website: halongmining.com | Twitter: twitter.com/HalongMining