Mining rigs of a super computer are pictured inside the bitcoin factory ‘Genesis Farming’ near Reykjavik, on March 16, 2018. – At the heart of Iceland’s breathtaking lava fields stands one of the world’s largest bitcoin factories at a secret location rich in renewable energy which runs the computers creating the virtual currency. (Photo by Halldor KOLBEINS / AFP) (Photo by HALLDOR KOLBEINS/AFP via Getty Images)
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George Kikvadze adjusts his webcam to display a 2×3 foot circuit board framed and displayed in trophy-like fashion on the wall of his office.
The board, which was used in Bitfury’s early bitcoin mining operations, contains hundreds of small green 55 nanometer silicon chips. These were among the first-ever Application Specific Integrated Circuits, commonly known as ASICs, to be used for industrial-scale bitcoin mining.
“This board itself mined 400,000 bitcoins,” Kikvadze told me in an interview. “Every VC in Silicon Valley missed the chance to get in on this early.”
The prop is a fitting visual for Kikvadze’s new memoir, entitled ‘And Then You Win’. With an impressive story of entrepreneurship, opportunism and perseverance, the book tells the harrowing insider story of how Bitfury arose from nothing to become one of the most consequential companies in the bitcoin ecosystem.
What started as a backwater mining operation in Eastern Europe would go on to employ over 1,000 people in 16 countries. It would operate hundreds of metawatts worth of data centers in Canada, Iceland and Eurasia that powered as much as 40 percent of the bitcoin network. It spun off what would become industry household name miners like Hut 8, Cipher Mining, and American Bitcoin.
Bitfury’s Early Years
Kikvadze begins the story with a personal anecdote that is quite common among early bitcoiners: experiencing a currency collapse as a child. George’s parents saw their savings evaporate overnight when the Soviet Union collapsed in 1991, and the notion that things that appear to be robust and stable can go belly up on a moment’s notice would be forever ingrained in his psyche.
“Growing up under the shadow of Soviet power instilled in me a deep-seated lesson…never entrust your future entirely to centralized authority,” he writes.
He was fortunate enough to leave his home country of Georgia shortly thereafter to study in the US, where he then built a successful hedge fund career.
But fate came calling, and in 2013 he was introduced to Valery Vavilov, originally from Latvia, who would soon red pill him on the “magic internet money” known as bitcoin and convince him to join his upstart mining operation called Bitfury.
George, Val and the Bitfury team would set up shop in a top floor office in central Kiev above Maidan Square, where the team would focus on building out their business by day and, eventually, participating in the 2014 Maidan Revolution by night.
Full Stack Bitcoin Company
Vavilov insisted early on that the grandmaster play was not to simply mine bitcoins in Iceland and Finland, but rather to establish Bitfury as a bitcoin infrastructure company that could service this growing industry across multiple verticals.
They would mine gold, but also sell picks and shovels to fellow prospectors – a “full stack bitcoin company”, as Vavilov put it. “Mining is just the beginning. We build the infrastructure, the security, the software. Everything.”
Manufacturing nanochips was a logical place to start, as there was an obvious need in the industry for a Western counterweight to big Asian chipmakers like Canaan and Bitmain that dominated the space.
It didn’t help that the company’s ragamuffin band of Ukrainian, Finnish and Latvian engineers had no formal education or training in designing silicon chips, building servers, or running data centers. But that liability quickly turned into an asset, as their intellectual horsepower and scrappiness was without rival.
An employee who went only by the name “X” used textbooks and online materials to teach himself the intricacies of chip fabrication, laying the groundwork for future conquests.
In addition to mining and chipmaking, Bitfury would go on to pioneer innovative complementary technologies. It acquired an immersion cooling company called Allied Control that was spun off as LiquidStack in 2021. BlockBox was the first-ever modularized bitcoin mining facility: a self-contained, air-cooled unit that could be unplugged and transported to remote locations with cheap electricity.
Bitfury Capital was created to seed other projects in the bitcoin world, and would go on to invest in names like BitGo, Abra and Xapo.
Axelera was a separate chip division focused specifically on artificial intelligence. Crystal Blockchain became one of leading blockchain analytics tools on the market.
Why Bitcoin Was Shunned by Silicon Valley
But scaling from a backwater miner and self-taught chip design shop into a full stack bitcoin company would require access to…