George Kikvadze adjusts his webcam to frame a 2×3-foot circuit board and displays it like a trophy on his office wall.
The board was used in Bitfury’s early Bitcoin mining operations and contains hundreds of tiny green 55-nanometer silicon chips. These are one of the first ever application-specific integrated circuits, commonly known as ASICs, used for industrial-scale Bitcoin mining.
“The board itself mined 400,000 Bitcoins,” Kikvadze told me in an interview. “All the venture capital in Silicon Valley missed the opportunity to get into this early.”
This prop is the perfect visual for Kikvadze’s new memoir, titled “And You Win.” The book tells the harrowing inside story of how Bitfury rose from the ground up to become one of the most important companies in the Bitcoin ecosystem, along with an impressive story of entrepreneurship, opportunism, and perseverance.
What began as a backwater mining operation in Eastern Europe has grown to employ more than 1,000 people in 16 countries. It will operate hundreds of metawatts worth of data centers in Canada, Iceland, and Eurasia, and will power 40 percent of the Bitcoin network. It later spun off well-known miners in the industry, including Hut 8, Cipher Mining, and American Bitcoin.
Early days of Bitfury
Kikvadze begins his story with a personal anecdote, common among early Bitcoiners. The story is that I experienced a currency collapse when I was a child. When the Soviet Union collapsed in 1991, George’s parents saw their life savings evaporate overnight, forever etching into his psyche the idea that anything that seemed solid and stable could come undone in an instant.
“Growing up under the shadow of Soviet power instilled in me a deep lesson not to entrust one’s future completely to centralized authority,” he writes.
He was lucky enough to leave his native Georgia soon after to study in the United States, where he built a successful career as a hedge funder.
However, fate called and in 2013, he was introduced to Valery Vavilov from Latvia. He would soon sell him the “magic internet money” known as Bitcoin and convince him to join his start-up mining operation called Bitfury.
George, Val, and the Bitfury team set up shop in a top-floor office above Maidan Square in central Kiev, where the team would focus on building the business during the day and eventually participate in the 2014 Maidan revolution at night.
full stack bitcoin company
Vavilov argued early on that Grandmaster’s strategy was not simply to mine Bitcoin in Iceland or Finland, but rather to establish Bitfury as a Bitcoin infrastructure company capable of servicing this growing industry across multiple verticals.
Not only do they mine gold, they also sell picks and shovels to fellow prospectors — what Vavilov calls a “full-stack Bitcoin company.” “Mining is just the beginning. We build the infrastructure, the security, the software, everything.”
Manufacturing nanochips was a natural place to start, as the industry clearly needed a Western company to compete with big Asian chipmakers like Canaan and Bitmain, which dominate the field.
It didn’t help that the company’s ragamuffin crew of Ukrainian, Finnish, and Latvian engineers had no formal education or training in designing silicon chips, building servers, or running data centers. But their intellect and cleverness were unmatched, so that responsibility quickly turned into an asset.
The employee, who goes by only the first name “X,” taught himself the intricacies of chip manufacturing using textbooks and online materials, laying the foundation for future conquests.
In addition to mining and chip manufacturing, Bitfury continues to pioneer innovative complementary technologies. The company acquired an immersion cooling company called Allied Control, which was spun off as LiquidStack in 2021. BlockBox is the first ever modular Bitcoin mining facility, a self-contained air-cooled unit that can be unplugged and transported to remote locations using cheap electricity.
Bitfury Capital was founded to seed other projects in the Bitcoin world and will invest in names like BitGo, Abra, and Xapo.
Axelera was another chip division that focused specifically on artificial intelligence. Crystal Blockchain has become one of the leading blockchain analysis tools on the market.
Why Bitcoin was shunned by Silicon Valley
But scaling from a frontier miner and a self-taught chip design factory to a full-stack Bitcoin company requires access to significant amounts of capital, along with some regulatory coverage.
Bill Tye, a venture capitalist, kitesurfer, and semiconductor industry veteran, became the project’s first major backer after seeing how the team miraculously developed a high-performance chip without formal training. It was “like performing brain surgery without practice,” he says in the book.
“They had no physical headquarters, no ‘deep technology’ background,” Tai writes in the book’s foreword, justifying the absurdity of his bet. “The lessons we learned well in Silicon Valley just didn’t work here.”
Unfortunately, the rest of Silicon Valley was less enthusiastic. In 2014, there was a lot of noise and empty promises in the Bitcoin mining industry, and most investors weren’t convinced that Bitcoin itself was worth paying attention to. And even more so for operations in Eastern Europe, which are deep within that ecosystem.
Uninterested in Silicon Valley, they decided to look east, where they were based. Through some of Kikvadze’s connections, the company was able to secure an energy deal of 3 cents per kilowatt hour to build a 20 megawatt facility at the Georgia site. The facility will soon be packed with 55-nanometer ASIC chips fresh off the foundry assembly line from Taiwan.
The Ragamuffin team of home-schooled chip designers will roll out a 28-nanometer version for commercial distribution in 2015, cementing Bitfury’s role as a global player in the ASIC chip wars.
Cryptochip Wars: East Vs. West
The memoir’s most dramatic moment dates back to 2016, when Bitfury sent a revolutionary 16-nanometer chip into production at Taiwan-based chipmaker TSMC.
A truly next-generation low-voltage chip with unparalleled processing power, there was nothing else like it on the market at the time. And the company was, in effect, betting on the farm’s success. The company paid millions of dollars upfront to mass produce the chips, and there were large queues to fill orders from customers.
Problems soon arose, however, as chips that worked perfectly in lab tests turned out to be mysteriously defective when manufactured at scale.
Diagnosing and ultimately resolving the problem took nine months, virtually an eternity in this rapidly changing space, and required the cooperation of several gun-for-hire ex-diplomats in Washington, D.C., with direct ties to TSMC Chairman Morris Chan.
The official explanation given for the defective chip was an oversight of a technical issue. But Kikvadze has long suspected that the root cause was industrial espionage by Asian competitors. He speculated that someone behind the scenes was influencing TSMC management and employees to intentionally block Bitfury’s chip orders.
“I don’t think people fully understand how business is done in China,” he told me. “It’s dog eat dog over there.”
For the Bitfury team, the situation was like facing death. Kikvadze told me that resolving the crisis was the most harrowing moment of the company’s 10-year roller coaster.
“Compared to this, being forced to lay off 95% of our workforce[in2019duetothebearmarket]was easy.”
In 2018, when Bitmain hosted its annual mining conference in Tbilisi, Georgia, Kikvadze had a unique opportunity to stab a competitor in the back. It was a bold and provocative move to literally march into Bitfury’s backyard and host a conference of this scale.
Kikvadze claims that through his connections at a local power company, he explored the idea of cutting off the electricity at the Tbilisi Opera House at the exact moment Bitmain CEO Jihan Wu was about to take the stage to unveil a new chip design.
Cooler thinking eventually prevailed, and he chose the more diplomatic option of continuing to post Bitfury advertisements on billboards around town throughout the conference.
“The strategy worked spectacularly,” he wrote. “While Bitmain held a conference, we were closing deals on the sidelines.”
Competition with Bitmain would rear its ugly head again during the 2018-2019 bear market, when Bitfury and many other companies in the industry were on life support. Bitmain, which raised $1 billion the previous year and ordered a ton of chips from TSMC, began dumping chips onto the market at 90-95% discounts in a classic race to the bottom.
This further strained Bitfury’s already precarious cash flow situation and led to large-scale layoffs. In order to stay alive to fight another day, another moonlight miracle was needed.
bitfury today
The collapse of FTX and subsequent market unwind in 2022 ultimately forced Bitfury to wind down its chip manufacturing operations.
The company continues to operate across high-performance computing, edge computing, cloud solutions, venture capital, and blockchain-as-a-service through its Exonum platform.
The 2022-2023 bear market was a tough time for most publicly traded mining companies, with Bitcoin falling below $20,000 and many companies facing banking problems during the Operation Chokepoint 2.0 era.
However, the election of President Donald Trump has breathed new life into the mining industry. The new administration’s push to make the US a strategic hub for Bitcoin mining and infrastructure, along with rapid growth in demand for AI computing, has put these companies back in the driver’s seat.
Recording the history of Bitcoin
Despite Bitcoin’s rapid march toward mainstream adoption, there is still a lack of narrative-driven content chronicling Bitcoin’s early days.
Why does this matter? Many of the early Bitcoin pioneers chose to live their lives in cash away from the public eye, and many of the current generation of Bitcoiners are drawn to the movement for economic rather than ideological reasons. Because of this, there remains a risk that Bitcoin’s birth and history will not be well documented for future generations to understand.
In this capacity, Mr. Kikvadze provides a valuable complement to the academic research documenting Bitcoin’s formative years. His front-line perspective on early funding, surviving the chip wars with Asian giants, the block size wars, and the brutal bear markets of 2018-19 and 2022-23 is a valuable contribution to Bitcoin history.
The book is also a fun and smooth read that beginners and experienced Bitcoiners alike will enjoy. It chronicles Kikvadze’s many adventures, including the legendary Necker Island Blockchain Summit held on Richard Branson’s private island, the birth of the Global Blockchain Business Council Trade Association, and a trip to Cuba where he evangelized Bitcoin to Fidel Castro’s son.
As a memoir written by its founder, there are certainly some details of the story that have been embellished or that others would likely disagree with, but the work as a whole is clearly a valuable contribution to the Bitcoin community and has value as a bridge to Bitcoin’s past.
Most importantly, “And then You Win” provides a powerful example of opportunism, adaptability, and grit that budding entrepreneurs should emulate.
“The Bitfury story started with the question of whether digital scarcity is possible, but it has become proof that change is inevitable for those who refuse to quit,” Kikvadze concluded. “We started as miners, became builders, and evolved into enablers.”
