"Blockchain's first stock" Canaan Technology listed, 26 questions to answer everything
Author: Tang Xialing, Wang Jiajian
Just now, on November 21, Canaan Technology was listed on Nasdaq, and the "first blockchain stock" was born. Transaction code: CAN, issue price $9, raised $90 million.
Canaan Technology was established in 2013. The domestic main body, Canaan Zhizhi, is a provider of supercomputing solutions through high-performance computing proprietary chips. It is the second largest manufacturer of bitcoin mining machines in the world, and the bitcoin mining machines sold by Canaan Accounting for 22% of the total computing power of all Bitcoin mining machines sold globally, mining machine revenue accounts for more than 90% of sales revenue. In 2017 and 2018, the net income was 375.8 million yuan and 122.4 million yuan respectively.
Lingting Blockchain (public account ID: lingtingqkl) is the first commercial observation column in the blockchain industry, created by Tang Xialing, winner of the China News Award and editor-in-chief of Babbitt, and her team.
Ling Ting Blockchain had an exclusive conversation with Kong Jianping, Co-Chairman of Canaan Zhizhi for the first time. 26 questions, answering all your questions about Canaan Zhizhi's listing at one time.
1. Ling Ting: How do you feel now?
Kong Jianping: Maybe because the listing cycle has been extended to several years, I am not as excited as I was in the past few years, but I am still very happy that the mainstream capital market and investors are finally connected with the blockchain industry. I also see that everyone is supporting us. , to bless this industry, I am still moved.
2. Ling Ting: What are your expectations after listing?
Kong Jianping: This listing is actually a link, a link between the traditional capital market and new industries, and a link between the traditional world and the new economic world, which may lead to more chemical reactions. We also look forward to more people to the district Industries such as blockchain and artificial intelligence have a better and more comprehensive understanding.
3. Ling Ting: Jianan Zhizhi's income model is very simple, what do you think?
Kong Jianping: In 2015, we positioned ourselves as chips, not mining machines. Our income includes chips, mining machines and AI. In 2016, the design, development and layout of the AI chip industry began, and mass production began in 2018, and this revenue will also increase. As far as the mining machine is concerned, its base is getting bigger and bigger, and the income stability will be higher and higher. The iteration of the mining machine will increase the certainty of the income, and the growth will be more clear.
A few years later, what we expect is to achieve a 1:1 ratio between blockchain and AI business.
4. Ling Ting: Chips require a lot of resources and capital investment. Where is your competitive advantage?
Kong Jianping: The digital currency Bitcoin POW calculation has very high requirements for low power consumption and high performance of the chip, which is much higher than other chips. Nearly 80% of the cost of a mining machine is the chip, so the profit from selling the mining machine is essentially the profit generated by the chip.
This makes the mining machine industry have two important points, one is the accumulation of technology, and the other is the process. The chips used in the mining machine are all the most advanced process nodes, and the investment is very huge. Generally, entrepreneurial teams will not have too many opportunities for mass production.
The core of the competition of mining machines is the competition of chips. Therefore, chip design, supply chain and financial strength are indispensable. The mining machine industry has entered a pattern dominated by several large companies, and the bitcoin mining machine companies that are still in the initial financing stage must have no chance.
5. Ling Ting: Why are mining companies so willing to go public?
Kong Jianping: Mining companies focus on chip design and have a higher degree of compliance, so it is easier for them to take the IPO route.
When we were planning the company in 2015, the digital currency and blockchain industries were not recognized by others. The road of listing can allow the industry to gain higher recognition; it can absorb and reserve more outstanding talents; at the same time, it can use the power of capital Make a better early layout of the entire industry.
6. Ling Ting: Why did you encounter ups and downs in the first three times on the road to listing?
Kong Jianping: Canaan has been at the forefront of blockchain companies, especially mining machine companies going public: from A-shares to Hong Kong stocks, and then to U.S. stocks. We were never rejected, we were constantly asked, one question after another. We were overly optimistic about the regulator's understanding of this matter, and the timing was not ripe.
Take Hong Kong as an example: we conducted pre-A1 communication for three months, and after the pre-hearing, we formally submitted the prospectus. But after other companies also submitted, the supervision began to ask more questions. Later, the Hong Kong stock market also crashed, and the currency price fell, so we did not continue to promote it.
Canaan Mining Machine sales only accept RMB payment. Therefore, we also lost this part of the market where digital currency is used to buy mining machines, which is one of the reasons why Canaan lost a piece of market share.
That's because we have a longer-term perspective. If you accept digital currency to buy mining machines, then we have to do KYC, which is very difficult in practice. The ensuing question is: Do I need to be licensed for holding and receiving coins? After holding a large amount of currency, assuming you are listed, should the company that buys your stock be licensed? Therefore, we make it clear: only legal currency is accepted to buy mining machines.
Canaan AI chip
7. Ling Ting: So, you started planning to go public very early?
Kong Jianping: I made a strategic positioning in 2015, and I mentioned two points:
One: Doing business in China must be legal and compliant, and there should be no original sin. Otherwise, today and tomorrow will be great, but the day after tomorrow may not be so.
Two: There are two roads in front of us, one is to make chips, and the other is to make the entire bitcoin industry chain. From the perspective of the company's genetics, we are more suitable for making chips, because the pumpkin (Zhang Nangeng) team is still a technical gene, and the layout of the entire industrial chain cannot be successful in every field, so we decided to make chips. We think this industry will be huge, and it is impossible to be the first in every field. We need to focus on one field to make a breakthrough.
Of course, we will personally invest in some blockchain or digital currency projects, but the main body of the company will try to keep it simple and develop around the main business.
8. Ling Ting: What do you think of the competition between Canaan and Bitmain, Ebang International and other companies?
Kong Jianping: Everyone has made great contributions to this industry. From a specific competition point of view, because our company does not accept Bitcoin, does not mainly engage in mining, and does not hoard coins, part of the market cannot get it, and there is no value-added profit of coins. In recent years, we have been ranked second in the market. However, after listing, we will have a greater grasp of the supply chain and capital investment. Our goal is to strive to be the first in the industry in terms of market share in 2020.
9. Ling Ting: Will the recent problems in Bitmain be an opportunity for Canaan to counterattack?
Kong Jianping: If we talk about a counterattack, Canaan’s counterattack is definitely not because of Bitmain, but our own pace, our accumulation in the chip field, and our governance structure, that is, board governance and CEO management, which do not exist. The result of too many internal power struggles, we certainly hope that Bitmain can develop well, and a better future of the industry needs to be jointly promoted by excellent friends and businessmen.
Canaan only has one CEO, and that is Zhang Nangeng. But there are two chairman, me and him. In terms of division of labor, he cares more about R&D, and I care more about operations. From the perspective of the entire company structure, he is in charge of everything, unless the board of directors of the company needs to make decisions. After listing, he also has the most voting rights, which can ensure the stable development of the company. My job is to cooperate with him. In line with the company's strategic needs.
There are two basic principles in my participation in company management. One is that the resolutions of the board of directors must be implemented in place, even if they are wrong. Second, there is only one CEO, Zhang Nangeng, and everyone is under the control of the CEO.
There is no God in business management, and anyone's decision-making may be wrong, but this is not important. The important thing is how to maintain the company in a state of low risk and long-term survival, so as to seize opportunities in the ups and downs of the industry.
10. Ling Ting: Corporate governance is the foundation of operation management. It may be because of the early stage of the industry that many blockchain teams are very irregular in corporate governance, but your governance structure has been set up relatively early. What do you think of this?
Kong Jianping: Because the industry is too early, everyone has not experienced this stage. In 2015, I raised some ideas about compliance and listing, and everyone agreed with this strategic direction. So in 2015, we made a very transparent corporate structure and governance norms, which to a certain extent ensured the steady development of Canaan Creative.
I have been starting a business myself, and partners are the easiest to get along with and the hardest to get along with. It's good because we are friends, but it's difficult because we expect too much from each other. But just because they are friends, everyone will pretend to show their good side to their partners at first, which is human instinct. The process of starting a business partnership is to tear off the mask of disguise step by step. Many people have not experienced this process, so there will be hostility, and employees will also stand in line due to disagreements at the top.
We should believe that no one is perfect, you have to agree with the other party's shortcomings, knowing the other party's shortcomings is easier to get along with than not knowing the shortcomings. For example, you know that this person is not good at detailing, this is not a shortcoming. You assign him a person who takes care of the details.
Kong Jianping and Tang Xialing
11. Ling Ting: Mining machine manufacturers have gradually formed an oligopoly. Will this run counter to the distributed and decentralized thinking advocated by the blockchain?
Kong Jianping: In any industry, in the end, a small number of people have the most resources. In the end, it must be a small number of people who hold the most bitcoins. It might not even be 80/20, it will become more concentrated.
This is the law of free competition. When a company makes a larger volume of a certain product, has stronger research and development capabilities, and stronger financial strength, it will naturally cost less and it will easily go further than others. The final competition will be whose The cost is lower.
Mining machine manufacturers can be regarded as important nodes for the efficient operation of this industry, but they are certainly not the center of this industry.
12. Ling Ting: You were an investor of Canaan Creative at the beginning. What kind of opportunity did you get to join the management team?
Kong Jianping: I first bought a second-hand Avalon mining machine at a high price in 2013, and lost money. Then I became an investor in 2015, and later joined the company. Pumpkin Zhang also talked to many people before he found me. At that time, he didn't think about investing, but just wanted to get some money to make chips, and everyone would share a penny when the mining machine was finished. But I said that this thing must be managed as a company, which is more suitable for long-term development. He listened to this suggestion and moved the company from Beijing to Hangzhou. Then I found Tsinghua Yangtze River Delta Research Institute to participate in the investment together, and other shareholders also successively invested in Canaan at different prices.
13. Ling Ting: In the development process of Canaan Zhizhi, are there any noble people?
Kong Jianping: From the perspective of investors, I think Changsanyuan is our noble person. It's not because of money, but when people don't understand the industry, they stand up and say that they helped Canaan Yunzhi when they needed it most.
14. Ling Ting: What excites you the most during the development of Canaan Zhizhi?
Kong Jianping
Kong Jianping
15. Ling Ting: What is Canaan Creative's corporate culture like?
Kong Jianping: We don't have a corporate culture now, not to say that we don't have one, but we don't want to generalize it. There is a lot of room for imagination in the future of blockchain companies. We don’t think it’s necessary to frame a concept now, and continue to iterate for a while. If you think it’s good, you can introduce us to learn.
16. Ling Ting: What is the goal of Canaan Zhizhi?
Kong Jianping: Going public is not the goal, and the boundaries of this industry cannot be predicted. For example, in 2015, I said that we were going to be a 100-billion-level company, and several founders said: Lao Kong, one billion is enough. Then I specially bought a book on Intel's development history for them. Intel has grown from a small company to a giant, and has become a company with a market value of hundreds of billions of dollars.
17. Ling Ting: So, in 2015, you decided that Canaan might be a 100-billion-level enterprise?
Kong Jianping: At that time, I thought that the development of chips, blockchain, and artificial intelligence might be very big in the future. Assuming that we have been on this track, we definitely have the opportunity to enjoy the dividends of this era and become such an enterprise.
18. Ling Ting: Will you deploy fields other than mining machines? Will coins be issued? Will it be an exchange?
Kong Jianping: It is not ruled out that it will deploy businesses other than mining machines. We will discuss business related to our main business and comply with regulations, and do different things at different stages. No currency will be issued in the short term, nor will it go directly to an exchange.
I think there are two points. First, listed entities that violate laws and regulations must not be listed, but we must pay attention to them. Because all innovations start from the edge. Many regulatory policies, laws and regulations will also make changes for industries driven by technology that bring greater value to mankind. The blockchain industry has a subdivision track that may not be compliant at present, but as long as Technology-driven can create a better tomorrow for human beings, and he will definitely be able to integrate into this society.
Second, don't be too superstitious about the short-term changes brought about by technology. If Bitcoin is only one dollar now, then everyone will have little motivation. But don't be too short-sighted about the future of this industry, if it really represents the dawn of a new era, its growth will far outpace the economies of the previous era.
Gold is the anchor of the industrial revolution era. In the information age, the carrier of gold no longer meets the needs of international trade. The US dollar is the only one. In the era of digital economy, it will be digital currency. Its settlement and circulation will be more efficient and more suitable for this Stages of production relations and productivity. In terms of economic size, the agricultural society is surpassed by the industrial society, the industrial society is surpassed by the information society, and the information society is bound to be surpassed by the digital society. Once Bitcoin becomes a real digital anchor, its size must exceed that of gold, or even the U.S. dollar. Of course, digital currency must be anchored in the digital age, and it may not necessarily be Bitcoin in the end, but Bitcoin has the highest probability at present.
19. Ling Ting: You are firmly optimistic about the blockchain industry. What is the underlying logic?
Kong Jianping: I first came into contact with blockchain and Bitcoin in 2012, when I was still a technical geek. Bitcoin is indeed very convenient for cross-border transfers. I think this is a technology-driven change. But at that time, I felt that this thing might have a future, and I didn't know how big the future would be.
After 2014, one is that the market has risen, and the other is that more digital currencies have become ecological. I found that Bitcoin can be anchored and traded with all digital assets in the digital world. It has become the anchor of the digital world. Since then, I have been firmly optimistic and believe in the future, and more data assets will be added to the circulation in the future. More physical assets will be digitized, and there will be more machine-to-machine communication. His future may not be imaginable from the current perspective.
20. Ling Ting: There are two types of people in this circle, one is early practitioners, and the other is newcomers who came in with a good professional background in the past two years. what do you think of them
Kong Jianping: No matter what kind of category, including myself, most people will definitely become cannon fodder for entrepreneurship in the end, but it will make the soil more fertile. In the iterative process, someone will become a new force or giant in the entire blockchain field, and the participation of various groups of people and this process are essential.
21. Ling Ting: Mainstream institutions have entered the market this year, including Morgan and Facebook. What do you think of them?
Kong Jianping: They play more of a role of public opinion and links, that is, let more people pay attention to this field, bring more users into the blockchain ecology, and at the same time occupy opportunities and space for start-up companies on some tracks.
22. Ling Ting: There is a voice saying that big companies can’t do blockchain well, what do you think?
Kong Jianping: The more unfavorable the policies, the more opportunities there are. But the main premise is technology-driven, which is called subversive innovation, or edge innovation. The more you are in the center of power, the less likely you are to make a big breakthrough, because no one wants to slap themselves in the face. It is difficult for a large factory to have subversive innovation. Its blockchain is to serve the original business, not to revolutionize its own life.
Why is there Pinduoduo? Because it is too easy for Tencent and Ali to make money. When you make money while lying down, you don’t want to make money standing up, let alone making money walking, let alone running. All disruptive innovations are on the edge. This logic is in line with the laws of nature. It is not easy to grow a tree under a big tree. Blockchain is on the edge now and will become mainstream in the future. You can see that mining machines and exchanges are not made by giants. Before the policy is not clear, the giants dare not do it and are unwilling to take this risk. But now the policy is better, and the coinless blockchain is not ruled out. Giants may be in To a certain extent, it has advantages over entrepreneurial teams.
23. Ling Ting: From a longer historical perspective, what stage is blockchain technology at now, and where is the future of commercial use?
Kong Jianping: Digital currency has entered a relatively clear upward trend, but I can't see an immediate explosion of blockchain applications.
The explosion of blockchain applications lies in the development of artificial intelligence and the data industry. It is more explosive when facing machines, because machines need trust. They can only speak with data, and they must be realized with codes and smart contracts. In the machine age, more smart devices are connected, and after human-computer interaction and machine-machine interaction, more data will be truly digitized, and the value of blockchain will explode by orders of magnitude.
In the 2G era, it is impossible for you to think that there will be Jinri Toutiao and Meituan. It’s too early to talk about the outbreak of the blockchain industry. Now more digital currencies will come out, including legal digital currencies, such as the DC/EP of the People’s Bank of China, cross-sovereign digital currencies, such as Libra, super-sovereign digital currencies, Like BTC, they are the mainstream in the past two or three years. It is valuable and meaningful to implement applications in other industries, but it is not yet a giant at this stage, and the future growth space may exceed imagination.
24. Ling Ting: What are the connections and differences between blockchain and the Internet?
Kong Jianping: The blockchain is a value Internet. In terms of value exchange, the blockchain has achieved better iterations. For example, digital currency can realize circulation without intermediaries, and it will make global value circulation very efficient, which will generate more value. We talk about the Token incentive mechanism. I think blockchain and Token are the carrier and medium for the value transfer of all things in the future, and everything is inseparable from Token. I don't agree with others talking about the coinless blockchain. The greatest value of the blockchain lies in the credible value exchange. The center is not centered for how to be more credible.
But in the future, for example, there is a machine, for which there is no currency, no value exchange can be realized, and it can only do other things. So Token is undoubtedly one of the most important things in the future, it is oil or blood.
25. Ling Ting: In October, the Political Bureau of the Central Committee of the Communist Party of China learned collectively about the blockchain. What impact does it have on the blockchain industry?
Kong Jianping: First, the most important thing is to rectify the name of the entire blockchain industry. When we talk about blockchain with others, we will get more respect and it will be easier to recruit talents.
Second, from a regulatory point of view, it should support the blockchain but not completely exclude digital currency, which is good for both the blockchain and digital currency industries.
26. Ling Ting: What impact will the emergence of Libra have on the entire industry?
Kong Jianping: First of all, I personally feel that it has promoted the deeper thinking of China's main leaders on digital currency and blockchain, and promoted China's research and policy implementation in the digital currency and blockchain industry.
Secondly, as far as Libra itself is concerned, it will definitely help the globalization of the US dollar, and which currencies it anchors will be more helpful to the globalization of which currencies. But it will bloodbath the legal currency of those countries with weak sovereignty and whose legal currency is easy to depreciate. But for China, it is fully capable of defense, and more likely to attack. It is also a major benefit to the entire digital currency industry and will bring more digital currency incremental users.
