OKX Blockchain 60 Lectures | Episode 41: The Rise of the Mining Circle (Part 1) — The Birth of ASIC Miners

Hello everyone, I'm Little K. Today we're going to talk about: "The Rise of the Mining Circle (Part 1) — The Birth of ASIC Miners."

In our last class, we mentioned that in 2011, blockchain technology entered China. The first area of contact and the one with the most profound impact was the mining industry. But to talk about how the mining circle initially rose, we have to mention two young men. One was Zhang Nangeng, and the other was Jiang Xinyu. Together, they would build a billion-dollar mining empire.

The story begins in 2011. Zhang Nangeng was then pursuing his master's and doctoral studies at Beihang University. He had a hobby—he loved watching anime. According to him, he could watch nearly 500 episodes of anime a year. People who love anime tend to be passionate and idealistic, and these labels laid the foundation for his future entrepreneurial journey.

By chance, Zhang Nangeng came into contact with Bitcoin. Coincidentally, in June of that year, the world's first FPGA miner was released. Previously, mining was done through computer CPUs and GPUs. Although there were some differences in hashrate, there wasn't a generational gap. Until the emergence of FPGA miners, which increased hashrate by tens or even hundreds of times on the basis of original mining, can be said to have completely disrupted the existing mining model.

In this situation, on one hand, Zhang Nangeng had a technical background. Before returning to Beihang for further studies, he had worked as a technician at the China Aerospace Science and Industry Corporation for three years. On the other hand, to solve his living expenses problem, Zhang Nangeng chose to enter this industry and began developing FPGA miners in his laboratory at Beihang University.

To promote the new miners he developed, Zhang Nangeng frequently appeared on the Bitcoin forum bitcointalk under the ID "ngzhang." Gradually, "Pumpkin Zhang" gained fame in the circle. According to the normal career path, Zhang Nangeng's future should have been graduation and employment. But an incident pushed Zhang Nangeng onto a different path—entrepreneurship.

In 2012, an American organization called Butterfly Labs announced on the Bitcoin forum that they would develop ASIC miners with hashrate more powerful than FPGA miners, and they would not sell them externally. This meant that once Butterfly Labs succeeded, they would control most of Bitcoin's hashrate and completely monopolize the entire network.

Watching Butterfly Labs about to destroy the original ideals of the Bitcoin world, passion and idealism suddenly erupted from Zhang Nangeng. Upon learning this news, Zhang Nangeng decided to develop ASIC miners himself to prevent the possible monopoly of the Bitcoin world. He immediately applied to his professor for a leave of absence. Unfortunately, the school did not agree. So Zhang Nangeng resolutely decided to drop out the next day and start his own business. Later, Zhang Nangeng recalled: "The reason I got into making miners was that I felt Butterfly Labs was deceiving people. If I didn't stand up, the entire mining industry would be finished."

Whether it was luck or talent, in this life-and-death race concerning the Bitcoin network, Zhang Nangeng won. "Pumpkin Zhang" created the world's first ASIC miner before Butterfly Labs and named it "Avalon." In the anime "Fate," "Avalon" represents the strongest defensive weapon. Later, in April 2013, Zhang Nangeng and his friend Li Jiaxuan founded Canaan Creative. The first batch of Avalon miners produced sold out completely.

Thus, Zhang Nangeng became the first dragon slayer in the history of the mining circle, officially elevating a mining game into a feast of capital and hashrate. However, while Zhang Nangeng was succeeding, his arch-rival Friedcat—Jiang Xinyu—was not idle. Friedcat would single-handedly open the golden age of the mining circle. As for Friedcat's story, let Little K keep you in suspense—we'll talk about it in the next class.

Special thanks to Teacher Kevin Shao for his help and guidance with this episode.

Sina Weibo: @邵建良kevinshao

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This article may contain product-related content not applicable to your region. This article is intended to provide general information only and does not assume responsibility for any factual errors or omissions herein. This article represents only the author's personal views and does not represent the views of OKX. This article is not intended to provide any of the following advice, including but not limited to: (i) investment advice or investment recommendations; (ii) offers or solicitations to buy, sell, or hold digital assets; or (iii) financial, accounting, legal, or tax advice. Holding digital assets (including stablecoins) involves high risk, may fluctuate significantly, and may even become worthless. You should carefully consider whether trading or holding digital assets is suitable for you based on your financial situation. For questions about your specific situation, please consult your legal/tax/investment professional. The information appearing in this article (including market data and statistics, if any) is for general reference only. Although we have taken all reasonable precautions in preparing these data and charts, we assume no responsibility for any factual errors or omissions expressed herein. © 2025 OKX. This article can be reproduced or distributed in full, or excerpts of 100 words or less from this article can be used, provided that such use is non-commercial. Any reproduction or distribution of the entire article must also prominently state: "This article is copyrighted © 2025 OKX, used with permission." Permitted excerpts must cite the article name and include the source, for example "Article Name, [Author Name (if applicable)], © 2025 OKX". Some content may be generated or assisted by artificial intelligence (AI) tools. Derivative works or other uses of this article are not permitted.

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