I recently bought a bunch of ASICMiner Block Erupter USB miners on Ebay. They are really just collector’s items at this point, since mining technology passed them by years ago. I did start researching the company, which is how I came across the Friedcat mystery. I spent more time researching this crazy story than a sane person should, so I figured I would document what I discovered:

Friedcat’s Early YearsFriedcat’s Early Years

Friedcat (Jiang Xinyu ) was born in 1986 in Shaoyang, Hunan Province, China. Very few details of his childhood are known, but reasonable assumptions can be made. Shaoyang was a working class region. It is unlikely that his childhood was wealthy. It is likely, however, that his parents were strongly interested and motivated towards getting him the best education possible. He had enough raw intellectual ability to gain admittance to the First Middle School of Shaoyang, Hunan, but he would probably also require coaching, exam preparation and strong academic nurturing to succeed as he did.

The First Middle School of Shaoyang was the city's elite school, a feeder for top universities. According to the school’s web site, the first principal was “Chairman Mao's teacher, Mr. Zhang Gan, a famous educator.” Friedcat was an exceptional student. His name still appears on the permanent Honor Roll displayed on a wall near the front entrance. At graduation he was ranked 11th academically in Hunan Province. He was admitted to the University Of Science & Technology Of China (USTC) when he was 15 years old. This institution is considered one of the most competitive universities in the country.

USTC, Hefei, Anhui China

Contrary to information found on some online articles, Friedcat never received a PhD. He was awarded a master’s degree in computer science in 2009, when he would have been 23 or 24 years old. His thesis was entitled “Constructing Secure Thread Mechanisms Using Formal Methods.”

He then entered the USTC-Yale High Confidence Software Research Center PhD program. This was a joint USTC- Yale program that was located on the USTC China campus. It is true that Friedcat spent time at Yale University in New Haven, Connecticut in 2010-2011. He was a visiting scholar/research intern of the FLINT group (Formal Languages and Intermediate Notation Theory), affiliated with Yale Computer Science Department, under Professor Zhong Shao. This was labeled as a post doc program at times, which may have caused the confusion about Friedcat’s doctoral status.

At USTC Friedcat met two people who would remain in his life post college - Wang Xian, his then girlfriend and future wife, and Fan Dawei, his future business partner. Friedcat introduced Fan Dawei to the Haskell programming language while they were students at USTC.

Friedcat and Fan Dawei’s friendship grew when they both were members of the FLINT visiting scholar program at Yale University, in New Haven, Connecticut. They were the only two Chinese scholars in that program at the time. They co-authored a paper while at Yale:

"Proof-Carrying Compiler Code Optimization and Program Specification Conversion" (出具证明编译器中代码优化与程序规范转换). Journal of Chinese Computer Systems (小型微型计算机系统), Vol. 7, pp. 1400–1405.

Friedcat and Fan Dawei were roommates at Yale. It was during this time in the U.S. that Fan Dawei introduced Friedcat to bitcoin. Reading the white paper changed the trajectory of both their lives. There was no indication previously that Friedcat had strong political views. He was an academic preparing for life as a scholar within the Chinese system. Now, he began to be introduced to the anarchic, libertarian ideas of the Austrian school economists and Ayn Rand. Fan Dawei was quoted as saying "I was originally a mild-mannered centrist. He turned me into a complete anarchist." The two students would discuss politics and bitcoin in their off campus apartment in New Haven, frequenting the Chinese restaurants that catered to the large Chinese student population at Yale. Friends described Friedcat as a bit of an introvert, with a peaceful, non aggressive nature and a good sense of humor. Friedcat was a devoted carnivore. Enjoying restaurant meals seemed to be his main social activity.

Friedcat and Fan Dawei both dropped out of the visiting scholar program. Both had lost interest in their academic path, and their focus turned exclusively to bitcoin. They began to plan their mining business while still in the U.S.

They returned to China in early 2012, first stopping at the USTC campus to pack up their belongings, then moved to Shenzen to start their bitcoin mining business. Friedcat created his Bitcointalk user name on January 16, 2012.

ShenzhenShenzhen

Shenzhen Skyline (2012)

The founders of the new company moved to the Fengye Pinyuan serviced apartment complex, Nanshan District, Shenzhen. located at South Mountain Ave & Binhai Ave intersection, near Shenzhen University and the high-tech park. The building where they lived is now called The Maple Leaf Kwaifa Apartment. It is listed for overnight stays on Tripadvisor. Friedcat shared a room with Zhuang Zhong, and Fan Dawei shared a room with Wang Song.

Shenzhen was already being described in 2012 as China’s Silicon Valley. It was a city of migrants. It embodied the “shanzhai” culture. Shanzhai literally means "mountain fortress" and originally referred to bandit strongholds — by extension, counterfeit or imitation products. It was a culture of copying existing products cheaply. Friedcat and his co-workers could develop their mining products, then quickly and easily have them manufactured. This was crucial in the competitive early days of bitcoin mining, and Friedcat exploited this advantage. Fan Dawei registered Bitfountain, the operational company behind ASICMiner, in Shenzhen on July 12, 2012. It was agreed that Fan Dawei would be responsible for managing internal product design, while Friedcat would handle investor relations. Bitfountain and ASICMiner never had a website. All Friedcat’s investor and customer relations were done through Bitcointalk. These threads are still all accessible. Zhuang Zhong was responsible for software and coding. Wang Song handled operations, procurement, supply chain, and mining farm management. He managed the Shenzhen and Huai'an farms.

ASICMiner began listing on the Global Bitcoin Stock Exchange (GLBSE) on August 7, 2012. It has been suggested that this was the first ICO in history. The total shares issued were 400,000, at a price of 0.1 BTC per share. Bitfountain held 236,038 shares (59%), and the public float was 163,962 shares, or 41 %. The total capital raised was about $150,000. 100% of the profit was to be distributed to shareholders, weekly, on Wednesdays.

Both Wu Jihan and Xie Jian invested 1,000 BTC at the IPO, and each received 10,000 shares and 2,500 bonus shares. Both of these people will become relevant as the story unfolds.

The Early Days Of Bitcoin MiningThe Early Days Of Bitcoin Mining

It makes sense to look at Bitfountain’s offering in the context of the bitcoin mining ecosystem in 2012. During this period, CPU and GPU mining were obsolete, and field programmable gate array (FPGA) mining was being explored. It was the beginning of the ASIC era.

Butterfly Labs was the first company to publicly announce their ASIC technology, in June of 2012. The other four companies in the race were Avalon/Canaan, bASIC, and Bitfountain’s ASICMiner. Bitfountain had a different business plan than the others. They intended to develop the chip to mine internally, and sell shares to investors. The other companies intended to market ASIC machines. Avalon shipped ASICs first, but Friedcat started mining first.

On December 28, 2012, the company posted photos of its chip carrier — the first ASIC miner — on Bitcointalk. By January 31, 2013, ASICMiner had 64-chip boards and aimed to deploy 800 of them, mounted in 10-board backplanes. By February 14, it had 2 TH/s miners operating.

Friedcat’s strategy was very successful at the beginning. At one point in early 2013 ASICMiner had 42% of the entire bitcoin network’s hash rate. Friedcat became aware of the growing concerns expressed on Bitcointalk about his high hash rate and the possibility of a 51% attack, so he began to voluntarily shed hash rate to keep it below 20%.

ASICMiner Block Erupter USB

ASICMiner also began selling the Block Erupter USB on Bitcointalk. These small devices had 330MH/s, and cost about $13 each. You can still buy them on Ebay as collector’s items. At the time they served to democratize bitcoin mining, making it easy for just about every stacker to participate. Reading about the Block Erupters reminded me of today’s solo miners.

Wu Jihan is rebuffed and starts BitmainWu Jihan is rebuffed and starts Bitmain

Wu Jihan had done well financially investing with Friedcat. Although the timing is unclear, at some point he asked Fan Dawei to join Bitfountain. He was a financial professional with investment experience at the time, and his credentials were impeccable. He also was a strong believer in bitcoin. Besides Bitmain, he may be best known for having translated the white paper into Chinese. His translation is still the one most widely used today. There is little explanation as to why Fan Dawei refused Wu’s offer to join the team, but as a result Wu started his own mining manufacturing company, Bitmain. Friedcat was not involved in the decision. The rest, as they say, is history. Ultimately Bitmain grew to dominate the space as a competitor of ASICMiner.

Friedcat and ASICMiner thrived in 2013. For an introvert, it seems a bit strange that he was head of investor relations, but all customer contact and marketing was done online on the Bitcointalk forum. His friends described him as unkempt and not very talkative. He would never appear publicly at meetups or conferences. Friedcat very much embodied the cypherpunk anarchist stereotype. One friend said Fried dreamed of one day living on a remote island with like minded people outside the reach of any government.

Friedcat was well liked, respected, and trusted on the forums. He was known for his catch phrase – “Don’t Panic.” He grew wealthy quickly, and those who invested with him did well too. Dividends were paid weekly.

The Decline And FallThe Decline And Fall

Despite all of ASICMiner’s success, the mining industry was very competitive at the time, and it wasn’t long before other manufacturers were affecting Bitfountain’s bottom line. In mid 2013, Avalon began shipping a massive amount of chips. The global hashrate was expanding rapidly.

Things took a real turn for the worse when Bitfountain failed to deliver their gen -2 chip on schedule in October of 2013. By then, Bitfountain’s share of the global hash rate was down to 4%. Ghash and Bitmain’s Antminer S 1 (manufactured by Wu Jihan) both ran on more powerful, more efficient technology.

To make matters worse, the Chinese government issued a number of negative pronouncements about bitcoin, causing the price to crash into a long bear market.

In January of 2014 Friedcat released his Gen – 3 chip, which immediately ran into severe problems. The design was good, but the third party manufacturer (Nantong Fujitsu) left an air gap between the gel and substrate that caused the chips to explode. They were unsellable. Over the next six months the company struggled.

There is no way to know exactly what Friedcat’s emotional state was through all of this, but his friends do indicate that he did suffer from depression. He may also have suffered from anxiety. Friends describe him as habitually chewing his fingernails until there was nothing left to chew.

Friedcat with the editor of YiBit media and her child

He now changed his tactics and became more public. He promoted his new Tube Miner, but it was never successful enough to dig the company out of its financial hole. One of his few public photos was taken at an event called "百万T算力时代！烤猫线下沙龙" which is roughly translated as "The Era of Million-T Hashrate! ASICMiner Offline Salon". It was held on August 2, 2014, in Shenzhen.

The fact that this conference even took place gives some idea of Friedcat’s emotional state at the time. The company never engaged in this type of promotional event before. Friedcat arranged to set up his own appearance at the event. In attendance were representatives of the entire Chinese bitcoin community at the time. Friedcat’s appearance was to promote the ASICMiner Tube Miner. Sales of the machine had not been good. His friends and co-workers couldn’t believe that he had agreed to speak publicly. He did not dress for the occasion, as can be seen by the photo. Everyone found it funny that he was wearing slippers. There is no recording of the event, but attendees have remarked that Friedcat was very open about ASICMiner’s business difficulties. It wasn’t a typical sales speech. He was visibly distressed.

Friedcat Speaking At The Million -T Hashrate Conference

Around this time Friedcat also agreed to sit for at least one interview at this time, but I can’t find any evidence that it actually took place.

Around this time Friedcat was also dealing with pressure from his long time girlfriend, Wang Xian, to get married. He had bought an apartment for the two of them in Shenzhen in 2013, but she wanted their relationship formalized. In October of 2014 they completed their pre-marriage medical examination at the Baohe District Women and Children's Health Center in Hefei, which would entail some travel from Shenzhen, and then got married in Hefei. It is assumed Wang Xian was from that area.

Friedcat’s business was failing and he had debts to pay. About a month before his marriage, in September of 2014, he made contact through a broker with a man named Lin Qingxin, a Fujianese businessman. At their first meeting Lin showed Friedcat his pilot license, which is apparently a sign of power and wealth in China. They entered into an agreement to jointly operate a mining farm in Huai'an, China, far from Shenzhen and not easily accessible to travel to at the time. Lin represented himself as the head of a food company. The agreement was as follows:

Lin would provide the mining facility, which would be housed in a designated “cold storage” facility of a food company. This arrangement was quasi legal at best. Lin promised that they would receive cheap subsidized electric rates from the Jiangsu government because the mining farm would be concealed within a cold storage unit of the food company. Friedcat would supply the miners and pay for the electricity costs. I could not locate a copy of this contract.

In mid-to-late October 2014, Friedcat told Rock Xie about the agreement with Lin in Huai'an, and proposed that this existing, already-running hashrate could be sold to customers in a cloud mining type arrangement.
Friedcat told Rock Xie that selling the hashrate was not just a one-time thing, but was intended to become a long-term brand for ASICMiner like Bitmain's HASHNEST platform. ASICMiner (Friedcat) would own and maintain the machines in Huai'an, and RockMiner (Rock Xie's company) would be responsible for sales and customer relations. Rock Xie agreed.
Almost immediately, the agreement with Lin ran into problems It’s not clear whether Friedcat failed to deliver the promised hash rate, failed to pay the electric costs, or something else, but there was a provision in the contract where failure to perform would incur a penalty.

Friedcat remained in Shenzhen, so he didn’t really have a day to day handle on what was going on in Huai'an. This was a questionable deal from the start. Neither Friedcat nor Lin were in any position to legally enforce the terms of the agreement, but Lin held all the cards. He clearly had connections in Huai'an which may have extended to the local authorities. Vague references were later made in news reports that there was some mafia related activity in the area, but there is no way to know whether this was a reference to Lin.

On December 25, 2014 Lin stole all of AMHash’s hash rate by pointing the machines to a different pool address. At no time did Lin have any access to Friedcat’s bitcoin wallets, by all accounts. Friedcat discovered this theft two days later, but did not tell Rock Xie. When Rock Xie noticed, Friedcat told him that it was a mining farm maintenance issue, and that the machines would be back online soon. Relying on this, Rock Xie kept paying the investors.

Friedcat tried to resolve the issue. He sent a team from Shenzhen to Huai'an, but this didn’t help. It seems some local tough guys surrounded Friedcat’s employees and were basically threatening them. Friedcat apparently made a trip himself, but could not resolve the issue. Employees have said that Friedcat’s lawyer had sent a letter to Lin’s company, and that a police report was filed. There is no evidence of this. It seems unlikely to me that, considering the quasi legal nature of the agreement, Friedcat would have gotten the courts and police involved, but I can’t say for sure.

His friends and co-workers could see that Friedcat was distressed. There is some indication that the ASICMiner group was planning to relocate to Sweden. Some sources say visas and plane tickets were acquired, but they were never used. Friedcat bought a plane ticket for a planned trip to Thailand that was scheduled for the middle of February. There is no evidence that he took that flight.

Friedcat disappeared on January 25, 2015. On February 7 one of his Chinese social media accounts (QQ Zone?) sent a message, a reference to the documentary “What If The USA Didn’t Exist?” This doesn’t seem to make sense, though. The documentary in question supported a right wing U.S. centric view of the world. Friedcat was an avowed anarchist. Furthermore, the message can’t be verified due to the private nature of the forum. On February 8, ASICMiner sent its last payment to AMHash. AMHash continued to pay dividends until February 28, 2015, when AMHash announced that dividends were suspended. The Bitcointalk forum was filled with speculation and anger. Everyone assumed that FC was running a cloud mining scam. The vitriol seems out of proportion to me, since the original investors had done extraordinarily well on their investment, and the most recent cloud pool participants were really looking at a very minor loss at best. The investors who speculated at the stock’s peak, however, probably did stand to lose significant money as the price plummeted.

Fan Dawei, his closest friend and business associate, did not speak in any detail about Friedcat’s disappearance. His whereabouts are unknown to this day. Friedcat’s wife Wang Xian obtained a divorce judgement on October 15, 2015 in Hefei Intermediate People's Court. Friedcat never appeared to contest the divorce. There is no public record of the terms of the divorce. She has never spoken publicly about her husband.

In January of 2018 a reporter named Liu Jing from AI Caijing paid a visit to the Huai'an factory. It was empty. She spoke to a security guard, who had apparently worked there during the time when the mining operation existed, but he was evasive and unwilling to talk much. He told her “ he had never heard of Bitcoin and that Huai'an does not engage in things that the country does not encourage.

Site Of The Huai'an Mining Farm (2018

Liu Jing also visited Friedcat’s mother, who immediately asked the reporter if she knew where her son was, and said that she was looking for him too. There are no details as to where the mother lived, but it was presumably in Shaoyang, Hunan.

What Happened To Friedcat?What Happened To Friedcat?

Speculation has been rampant over the years since Friedcat’s disappearance. Here are a few theories I have seen:

He Committed SuicideHe Committed Suicide

There is evidence that Friedcat was clinically depressed right before his marriage. The pressures of his personal life and business were probably extreme. On the other hand, there was no suicide note, nor any inclination from those close to him that he was suicidal. One of his friends had dinner with him a week before he disappeared, and he is on the record as saying he seemed perfectly normal. Also, bitcoin wallets he is believed to have had control have had activity twice since his disappearance. He was (is?) a very intelligent guy and a committed bitcoiner who I’m fairly certain secured his keys. It’s possible he gave them to his wife or mother, but they would have executed incredible restraint in not emptying them over the years.

He Was MurderedHe Was Murdered

This is a possibility. I can imagine all kinds of horrible wrench attach scenarios where Lin or his henchmen tortured Friedcat into revealing his keys, but I don’t think that is likely. All signs point to Lin being a savvy businessman with local contacts and shady business practices, but I don’t think he would risk murder for a relatively minor disagreement. All indications are that he kept the hash rate and the machines. He came out way ahead. I would also expect that if this was the case, the wallets would have been run through mixers and drained of their bitcoin by now. Yes, it is possible he was murdered, but I don’t think the odds are high.

He Was ArrestedHe Was Arrested

There is no evidence that he was arrested for his subsidized electricity scheme. In China the authorities don’t always announce arrests, so it’s possible, but it seems unlikely. The scam ran for a brief period of time, and wouldn’t have used enough electricity to warrant attention.

He’s Living On An Island With Mircea PopescuHe’s Living On An Island With Mircea Popescu

I like to think this is the case. The best evidence would be his wallet activity since his disappearance. Here’s what we know:

• On the date Rock Xie announced Friedcat’s disappearance, March 3, 2015, 19,000 bitcoin were transferred from three wallets allegedly owned by Friedcat. Rock Xie said publicly that Friedcat was the only one who controlled Bitfountain wallets.
• July 29 and August 4, 2017, five transfers occurred across two of Friedcat’s wallets totalling 17,597 BTC. This coincided with the BCH fork. The two addresses involved were 15h6A2a3D31vRviBDdSpvhLtYJq3aePhdW and 1BnkEt2ceoVhnQVrqeAzigcroQ6MVyxFey.
• On November 12,2024 bitcoin address 1BnkEt2ceoVhnQVrqeAzigcroQ6MVyxFey, which had been dormant for seven years, transferred 206.34 BTC.

This would lead to the conclusion that Friedcat might be alive. However that would require that we believe Rock Xie that only Friedcat had access to the Bitfountain wallets. The March 3, 2015 transfer is odd, in that it took place the same day that RockXie announced Friedcat’s disappearance. Also, a Blockbeats article on September 13, 2020 cited an anonymous source claiming that those wallets belonged to a Bitfountain partner. If true, it seems to me that Fan Dawei is the only likely wallet owner. He was Friedcat’s closest friend and co-founder. He has refused to make any comments since Friedcat’s disappearance. In fact, he himself has pretty much disappeared.

So, who knows?