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News Article | November 29, 2016
Site: globenewswire.com

SAN JOSE, Calif., Nov. 29, 2016 (GLOBE NEWSWIRE) -- PDF Solutions, Inc. (Nasdaq:PDFS), the leading provider of process-design integration technologies to enhance IC manufacturability, today announced that Professor Marco Iansiti has joined the Company’s Board of Directors effective November 28, 2016.  Professor Iansiti has taught at the Harvard Business School for twenty-six years and consulted on strategy, business models, and innovation processes at such global companies as Microsoft, Facebook, IBM, Hewlett Packard, AT&T, Dell, and Amazon, among many others. “Professor Iansiti’s broad expertise advising worldwide companies and deep experience with big data analytics, which has made a transformational impact on tangential industries, will enable him to provide valuable strategic input to PDF Solutions,” said Lucio Lanza, PDF Solutions Chairman of the Board. “I look forward to working with the innovative and driven people and management of PDF Solutions,” said Professor Iansiti about joining the Board. “It is an exciting time to help shape the strategic and business choices of the Company as it opens up new markets with its Design-for-Inspection solution.” “It is with great pleasure that we welcome Professor Iansiti to our Board,” said Dr. John Kibarian, President and CEO of PDF Solutions. He continued, “Marco’s broad experience in strategy, business models and technology – all with a global perspective – will be invaluable as we continue to develop new products and solutions for electrical characterization in expanded markets.” Professor Iansiti is independent under the NASDAQ listing rules and will serve as Chairman of PDF Solutions’ Compensation Committee and as a member of both the Audit and Corporate Governance and Nominating Committees of the Board. He currently serves as the David Sarnoff Professor of Business Administration and heads the Technology and Operations Management Unit and the Digital Initiative at Harvard Business School. Professor Iansiti is also currently the chairman of the board of directors of Keystone Strategy Inc., a consulting firm he co-founded, and a member of the board of directors at Module Q, a personal resource management application. Previously, from April 2014 through November 2016, he was a member of the board of AltX, a data platform and marketplace for alternative investments, and from May 2011 to March 2012, Professor Iansiti was a member of the board of Leonardo-Finmeccanica SpA, a global high-tech company in the aerospace, defense, and security sectors, which is publicly listed in Italy.  Professor Iansiti holds an A.B. and Ph.D. in Physics from Harvard University. He is the author or coauthor of more than 100 articles, papers, book chapters, cases, and notes. PDF Solutions enables customers to reduce the time to market of integrated circuits (“ICs”), lower the cost of IC design and manufacturing and improve profitability. The Company has developed proprietary products and provides services that target the entire Process Life Cycle, which is a term used to mean the time from technology development and the design of an IC to volume manufacturing of that IC to product assembly and test. PDF Solutions’ products and services consist of proprietary test structures and electrical test systems, physical intellectual property, enterprise platform software and professional services. The Company’s Characterization Vehicle® (CV®) electrical test chip infrastructure provides core modeling capabilities, and is used by more leading manufacturers than any other test chips in the industry. Proprietary Template™ layout patterns for standard cell libraries optimize area, performance, and manufacturability for designing IC products. The Exensio® platform for big data unlocks relevant, actionable information buried in wafer fabrication, process control and test data through four, key components: Exensio®  -Yield, Exensio®  -Control, Exensio®  -Test, and Exensio®  -Char. The Exensio® platform is available either on-premise or via software as a service (SaaS). Headquartered in San Jose, Calif., PDF Solutions operates worldwide with additional offices in Canada, China, France, Germany, Italy, Japan, Korea, and Taiwan. PDF Solutions is listed on The NASDAQ National Market under the ticker symbol PDFS. For the Company’s latest news and information, visit http://www.pdf.com/. Characterization Vehicle, CV, Exensio, PDF Solutions, and the PDF Solutions logo are registered trademarks of PDF Solutions, Inc. or its subsidiaries. Template is a trademark of PDF Solutions, Inc. or its subsidiaries.


Eisenmann H.,PDF Solutions Inc.
Proceedings of the International Symposium on Physical Design | Year: 2015

The placement significantly influences the quality of a circuit. In the past decades a lot of placement algorithms were presented. The most popular ones are summarized here. Force-directed placers are able to place VLSI circuits with low wirelength within a suitable time. Examples for force-directed placers are Kraftwerk and Kraftwerk2, which start with an initial placement and use forces to evenly distribute the modules inside the placement area.


Product ICs/wafers include additional diagnostic, test, or monitoring structures opportunistically placed in filler cell positions, within tap cells, within decap cells, within scribe line areas, and/or within dummy fill regions. Improved fabrication processes utilize data from such structure(s) in wafer disposition decisions, rework decisions, process control, yield learning, or fault diagnosis.


The present invention discloses an e-beam inspection tool, and an apparatus for detecting defects. In one aspect is described an apparatus for detecting defects that includes a focusing column that accelerates the e-beam and separately, for each of the plurality of predetermined locations, focuses the e-beam to a predetermined non-circular spot that is within the predetermined surface area of each of the plurality of predetermined locations based upon the major axis,


Trademark
PDF Solutions Inc. | Date: 2016-11-14

Computer software for use in providing automated characterization and analysis of product chip and cell library layouts in the field of semiconductor manufacturing. Engineering and consulting services in the fields of technical support, engineering know-how, and best practices for semiconductor companies; engineering and consulting services in the fields of yield, performance improvement, and productivity improvement in the manufacture test and packaging of semiconductors; cloud computing featuring an analytic software platform to access and visualize big data for decision support; platform as a service (PAAS) featuring computer software platforms for business and manufacturing data analysis and decision support.


Trademark
PDF Solutions Inc. | Date: 2016-11-15

Computer software for use in providing automated characterization and analysis of product chip and cell library layouts in the field of semiconductor manufacturing. Engineering and consulting services in the fields of technical support, engineering know-how, and best practices for semiconductor companies; engineering and consulting services in the fields of yield, performance improvement, and productivity improvement in the manufacture test and packaging of semiconductors; cloud computing featuring an analytic software platform to access and visualize big data for decision support; platform as a service (PAAS) featuring computer software platforms for business and manufacturing data analysis and decision support.


News Article | October 27, 2016
Site: globenewswire.com

SAN JOSE, Calif., Oct. 27, 2016 (GLOBE NEWSWIRE) -- PDF Solutions, Inc. (“PDF Solutions” or the “Company”) (NASDAQ:PDFS), the leading provider of process-design integration technologies to enhance integrated circuit (IC) manufacturability, today announced financial results for its third fiscal quarter ended September 30, 2016. Total revenues for the third fiscal quarter of 2016 totaled $27.3 million, up 2% from $26.7 million for the second fiscal quarter of 2016 and up 14% from $23.9 million for the third fiscal quarter of 2015. Design-to-silicon-yield solutions revenue for the third fiscal quarter of 2016 totaled $18.6 million, down 10% from $20.6 million for the second fiscal quarter of 2016 and up 8% from $17.2 million for the third fiscal quarter of 2015. Gainshare performance incentives revenue for the third fiscal quarter of 2016 totaled $8.7 million, up 42% from $6.1 million for the second fiscal quarter of 2016 and up 31% from $6.6 million for the third fiscal quarter of 2015. On a GAAP basis, net income for the third fiscal quarter of 2016 was $1.9 million, or $0.06 per basic and diluted share, compared to $2.2 million, or $0.07 per basic and diluted share, for the second fiscal quarter of 2016, and compared to $1.5 million, or $0.05 per basic and diluted share, for the third fiscal quarter of 2015. Cash and cash equivalents were $118.5 million at September 30, 2016, compared to $126.2 million at December 31, 2015. Non-GAAP net income for the third fiscal quarter of 2016 was $5.4 million, or $0.17 per diluted share, compared to $5.3 million, or $0.17 per diluted share, for the second fiscal quarter of 2016, and compared to $5.8 million, or $0.18 per diluted share, for the third fiscal quarter of 2015. EBITDAR for the third quarter of 2016 was $7.2 million, compared to $7.1 million for the second fiscal quarter of 2016, and compared to $7.4 million for the third fiscal quarter of 2015. As previously announced, PDF Solutions will discuss these results on a live conference call beginning at 2:00 p.m. Pacific Time/5:00 p.m. Eastern Time today. The call will be simultaneously web cast on PDF Solutions’ website at http://ir.pdf.com/events.cfm. A replay of the web cast will be available at the same website address beginning approximately two hours after completion of the live call. A copy of this press release, including the disclosure and reconciliation of certain non-GAAP financial measures to the comparable GAAP measures, which non-GAAP measures may be used periodically by PDF Solutions’ management when discussing financial results with investors and analysts, will also be available on PDF Solutions’ website at http://www.pdf.com/press-releases following the date of this release. Information Regarding Use of Non-GAAP Financial Measures In addition to providing results that are determined in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP), PDF Solutions also provides certain non-GAAP financial measures. Non-GAAP net income excludes the effects of non-recurring items, stock-based compensation expenses, amortization of acquired technology and other acquired intangible assets, and their related income tax effects, as applicable, as well as adjusts for the non-cash portion of income taxes. EBITDAR is calculated by taking GAAP net income, adding back the effects of non-recurring items, stock-based compensation expenses, amortization of acquired technology and other acquired intangibles, depreciation expense and income tax provision (benefit). These non-GAAP financial measures are used by management internally to measure the Company’s profitability and performance. PDF Solutions’ management believes that these non-GAAP measures provide useful supplemental measures to investors regarding the Company’s ongoing operations in light of the fact that none of these categories of expense has a current effect on the future uses of cash (with the exception of certain non-recurring items) nor do they impact the generation of current or future revenues. These non-GAAP results should not be considered an alternative to, or a substitute for, GAAP financial information, and may be different from similarly titled non-GAAP measures used by other companies. In particular, these non-GAAP financial measures are not a substitute for GAAP measures of income or loss as a measure of performance, or to cash flows from operating, investing and financing activities as a measure of liquidity. Since management uses these non-GAAP financial measures internally to measure profitability and performance, PDF Solutions has included these non-GAAP measures to give investors an opportunity to see the Company’s financial results as viewed by management. A reconciliation of the comparable GAAP financial measures to the non-GAAP financial measures is provided at the end of the Company’s financial statements presented below. For a more detailed reconciliation of the adjustments made to comparable GAAP measures, please refer the “GAAP to Non-GAAP and EBITDAR Reconciliation” provided in the Investor Relations section of our website at http://ir.pdf.com/sec.cfm. The statements made on the conference call regarding PDF Solutions' financial results for its third fiscal quarter ended September 30, 2016, including the success of any new products, continued or increased adoption of the Company’s solutions, and the Company's future expected financial results, are forward looking and are subject to events and circumstances of the future. Actual results could differ materially from those expressed in these forward-looking statements. Risks and uncertainties that could cause results to differ materially include risks associated with: customers' production volumes at gainshare-covered facilities; adoption of the Company's new and existing solutions by new and existing customers; project milestones or delays and performance criteria achieved; the provision of technology and services prior to the execution of a final contract; and other risks set forth in PDF Solutions' periodic public filings with the Securities and Exchange Commission, including, without limitation, its Annual Reports on Form 10-K, most recently filed for the year ended December 31, 2015, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K and amendments to such reports. The forward-looking statements made in the conference call are made as of the date hereof, and PDF Solutions does not assume any obligation to update such statements nor the reasons why actual results could differ materially from those projected in such statements. PDF Solutions enables customers to reduce the time to market of integrated circuits (“ICs”), lower the cost of IC design and manufacturing and improve profitability. The Company has developed proprietary products and provides services that target the entire Process Life Cycle, which is a term used to mean the time from technology development and the design of an IC to volume manufacturing of that IC to product assembly and test. PDF Solutions’ products and services consist of proprietary test structures and electrical test systems, physical intellectual property, enterprise platform software and professional services. The Company’s Characterization Vehicle® (CV®) electrical test chip infrastructure provides core modeling capabilities, and is used by more leading manufacturers than any other test chips in the industry. The Design-for-Inspection™ (DFI™) solution extends the Company’s electrical characterization technologies into the e-beam measurement of extremely dense test structures, or DFI cells, across an entire fabrication process. Proprietary Template™ layout patterns for standard cell libraries optimize area, performance, and manufacturability for designing IC products. The Exensio™ platform for big data unlocks relevant, actionable information buried in wafer fabrication, process control and test data. The Exensio platform is available either on-premise or via software as a service (SaaS). Headquartered in San Jose, Calif., PDF Solutions operates worldwide with additional offices in Canada, China, France, Germany, Italy, Japan, Korea, and Taiwan. PDF Solutions is listed on The NASDAQ National Market under the ticker symbol PDFS. For the Company’s latest news and information, visit http://www.pdf.com/. Characterization Vehicle, CV, PDF Solutions, and the PDF Solutions logo are registered trademarks of PDF Solutions, Inc. or its subsidiaries. Design-for-Inspection, DFI, Exensio and Template are trademarks of PDF Solutions, Inc. or its subsidiaries.


News Article | February 13, 2017
Site: globenewswire.com

SAN JOSE, Calif., Feb. 13, 2017 (GLOBE NEWSWIRE) -- PDF Solutions, Inc. (“PDF Solutions” or the “Company”) (NASDAQ:PDFS), the leading provider of process-design integration technologies to enhance integrated circuit (IC) manufacturability, today announced financial results for its fourth fiscal quarter and fiscal year ended December 31, 2016. Total revenues for the fourth fiscal quarter of 2016 totaled $28.4 million, up 4% from $27.3 million for the third fiscal quarter of 2016 and up 18% when compared to total revenues of $24.1 million for the fourth fiscal quarter of 2015. Design-to-silicon-yield solutions revenue for the fourth fiscal quarter of 2016 totaled $19.5 million, up 5% from $18.6 million for the third fiscal quarter of 2016 and up 36% when compared to Design-to-silicon-yield solutions revenue of $14.3 million for the fourth fiscal quarter of 2015. Gainshare performance incentives revenue for the fourth fiscal quarter of 2016 totaled $9.0 million, up 3% from $8.7 million for the third fiscal quarter of 2016 and down 8% from $9.8 million for the fourth fiscal quarter of 2015. Total revenues for the fiscal year ended December 31, 2016, totaled $107.5 million, up 10% when compared with total revenues of $98.0 million for the fiscal year ended December 31, 2015. Design-to-silicon-yield solutions revenues for the fiscal year ended December 31, 2016, totaled $77.2 million, up 21% when compared with Design-to-silicon-yield solutions revenues of $63.8 million for the fiscal year ended December 31, 2015. Gainshare performance incentives revenues for the fiscal year ended December 31, 2016, totaled $30.3 million, down 11% when compared with Gainshare performance incentives revenues of $34.1 million for the fiscal year ended December 31, 2015. On a GAAP basis, net income for the fourth fiscal quarter of 2016 was $2.9 million, or $0.09 per basic and diluted share, compared to $2.0 million, or $0.06 per basic and diluted share, for the third fiscal quarter of 2016, and compared to $2.8 million, or $0.09 per basic and diluted share, for the fourth fiscal quarter of 2015. Net income for the fiscal year ended December 31, 2016, was $9.1 million, or $0.29 per basic and $0.28 per diluted share, compared to net income of $12.4 million, or $0.39 per basic and diluted share, for the fiscal year ended December 31, 2015. Cash and cash equivalents were $116.8 million at December 31, 2016, compared to $126.2 million at December 31, 2015. Non-GAAP net income for the fourth fiscal quarter of 2016 was $5.6 million, or $0.17 per diluted share, compared to $5.4 million, or $0.17 per diluted share, for the third fiscal quarter of 2016, and compared to $5.7 million, or $0.18 per diluted share, for the fourth fiscal quarter of 2015. Non-GAAP net income for the fiscal year ended December 31, 2016, was $21.6 million, or $0.67 per diluted share, compared to non-GAAP net income of $25.6 million, or $0.80 per diluted share, for the fiscal year ended December 31, 2015. EBITDAR for the fourth quarter of 2016 was $7.4 million, compared to $7.2 million for the third fiscal quarter of 2016, and compared to $7.5 million for the fourth fiscal quarter of 2015. EBITDAR for the fiscal year ended December 31, 2016 was $28.5 million, compared to $32.5 million for the fiscal year ended December 31, 2015. As previously announced, PDF Solutions will discuss these results on a live conference call beginning at 2:00 p.m. Pacific Time/5:00 p.m. Eastern Time today. The call will be simultaneously web cast on PDF Solutions’ website at http://www.pdf.com/events. A replay of the web cast will be available at the same website address beginning approximately two hours after completion of the live call. A copy of this press release, including the disclosure and reconciliation of certain non-GAAP financial measures to the comparable GAAP measures, which non-GAAP measures may be used periodically by PDF Solutions’ management when discussing financial results with investors and analysts, will also be available on PDF Solutions’ website at http://www.pdf.com/press-releases following the date of this release. Fourth Quarter and Fiscal Year 2016 Financial Commentary Available Online A Management Report reviewing the Company’s fourth quarter and fiscal year 2016 financial results, as well as providing first quarter 2017 financial outlook will be furnished to the SEC on Form 8-K and published on the Company’s website at http://ir.pdf.com/sec.cfm. Analysts and investors are encouraged to review this commentary prior to participating in the conference call webcast. Information Regarding Use of Non-GAAP Financial Measures In addition to providing results that are determined in accordance with Generally Accepted Accounting Principles in the United States of America (GAAP), PDF Solutions also provides certain non-GAAP financial measures. Non-GAAP net income excludes the effects of non-recurring items, stock-based compensation expenses, amortization of acquired technology and other acquired intangible assets, and their related income tax effects, as applicable, as well as adjusts for the non-cash portion of income taxes. EBITDAR is calculated by taking GAAP net income, adding back the effects of non-recurring items, stock-based compensation expenses, amortization of acquired technology and other acquired intangibles, depreciation expense and income tax provision (benefit). These non-GAAP financial measures are used by management internally to measure the Company’s profitability and performance. PDF Solutions’ management believes that these non-GAAP measures provide useful supplemental measures to investors regarding the Company’s ongoing operations in light of the fact that none of these categories of expense has a current effect on the future uses of cash (with the exception of certain non-recurring items) nor do they impact the generation of current or future revenues. These non-GAAP results should not be considered an alternative to, or a substitute for, GAAP financial information, and may be different from similarly titled non-GAAP measures used by other companies. In particular, these non-GAAP financial measures are not a substitute for GAAP measures of income or loss as a measure of performance, or to cash flows from operating, investing and financing activities as a measure of liquidity. Since management uses these non-GAAP financial measures internally to measure profitability and performance, PDF Solutions has included these non-GAAP measures to give investors an opportunity to see the Company’s financial results as viewed by management. A reconciliation of the comparable GAAP financial measures to the non-GAAP financial measures is provided at the end of the Company’s financial statements presented below. For a more detailed reconciliation of the adjustments made to comparable GAAP measures, please refer the “GAAP to Non-GAAP and EBITDAR Reconciliation” provided in the Investor Relations section of our website at http://ir.pdf.com/sec.cfm. The statements made on the planned conference call regarding the Company's future expected business performance and financial results are forward looking and are subject to events and circumstances of the future. Actual results could differ materially from those expressed in these forward-looking statements. Risks and uncertainties that could cause results to differ materially include risks associated with: customers' production volumes at Gainshare-covered facilities; continued adoption of the Company's solutions by new and existing customers; project milestones or delays and performance criteria achieved; the provision of technology and services prior to the execution of a final contract; and other risks set forth in PDF Solutions' periodic public filings with the Securities and Exchange Commission, including, without limitation, its Annual Reports on Form 10-K, most recently filed for the year ended December 31, 2015, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K and amendments to such reports. The forward-looking statements made in the conference call are made as of the date hereof, and PDF Solutions does not assume any obligation to update such statements nor the reasons why actual results could differ materially from those projected in such statements. PDF Solutions enables customers to reduce the time to market of integrated circuits (“ICs”), lower the cost of IC design and manufacturing and improve profitability. The Company has developed proprietary products and provides services that target the entire Process Life Cycle, which is a term used to mean the time from technology development and the design of an IC to volume manufacturing of that IC to product assembly and test. PDF Solutions’ products and services consist of proprietary test structures and electrical test systems, physical intellectual property, enterprise platform software and professional services. The Company’s Characterization Vehicle® (CV®) electrical test chip infrastructure provides core modeling capabilities, and is used by more leading manufacturers than any other test chips in the industry. The Design-for-Inspection™ (DFI™) solution extends the Company’s electrical characterization technologies into the e-beam measurement of extremely dense test structures, or DFI cells, across an entire fabrication process. Proprietary Template™ layout patterns for standard cell libraries optimize area, performance, and manufacturability for designing IC products. The Exensio® platform for big data unlocks relevant, actionable information buried in wafer fabrication, process control and test data through four, key components: Exensio-Yield, Exensio-Control, Exensio-Test, and Exensio-Char. The Exensio platform is available either on-premise or via software as a service (SaaS). Headquartered in San Jose, Calif., PDF Solutions operates worldwide with additional offices in Canada, China, France, Germany, Italy, Japan, Korea, and Taiwan. PDF Solutions is listed on The NASDAQ National Market under the ticker symbol PDFS. For the Company’s latest news and information, visit http://www.pdf.com/. Characterization Vehicle, CV, Exensio, PDF Solutions, and the PDF Solutions logo are registered trademarks of PDF Solutions, Inc. or its subsidiaries. Design-for-Inspection, DFI, and Template are trademarks of PDF Solutions, Inc. or its subsidiaries.


News Article | May 18, 2015
Site: techcrunch.com

The Shortlist Is Out — Vote Now In The Europas Awards For European Tech Startups Today we’re thrilled to offer an exclusive excerpt from Nathaniel Popper’s Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money, the definitive book about bitcoin. In this chapter we learn, in detail, the secrets behind the mysterious 21.co. Originally called 21e6, the company grew in secrecy to become one of the highest capitalized bitcoin ventures in the world. For much of the past two years, the Bitcoin company with the most money and high profile backers was one that almost no one knew existed.  With the arcane-sounding name 21e6, the company raised $70 million in 2013, with the initial investment coming in personal contributions from the elite of Silicon Valley, including Peter Thiel, David Sacks, Marc Andreessen and Ben Horowitz. Founded by the Stanford wunderkind, Balaji Srinivasan and four co-founders, 21e6 proceeded to roll out thousands of computers that were built to do nothing but generate new Bitcoins – an energy intensive computational process referred to as mining. The machines were loaded with custom-designed chips that had names like Yoda and Gandalf, and were submerged in a mineral oil solution that dispersed the incredible heat generated by the mining process. The company ended up running up against the difficulty of making money in the cut-throat business of Bitcoin mining, which became much more difficult as the price of Bitcoin dropped over the last year. This year, the company has renamed itself 21 Inc. and recently went public with a new fundraising round, that brought in another $56 million on top of the $70 million the company had already raised. While the company has remained tight lipped about its intentions, it is shifting away from mining Bitcoins for itself and focusing more on distributing mining hardware to consumers with the aim of supporting broader adoption of the technology. But the company’s creation played an important role in Silicon Valley’s embrace of Bitcoin. The startup began to form in early 2013, not long after Srinivasan had stepped away from the genetics startup, Counsyl, which he had founded in his Stanford dorm room and turned him into a local star. Srinivasan had been tracking Bitcoin for some time, but with more time on his hands he began talking about how to create a company with Matt Pauker, a cryptographer who did a guest lecture in an engineering course that Srinivasan was teaching at Stanford. They quickly saw the opportunity in Bitcoin mining. From the time Bitcoin was released in early 2009, computers trying to generate Bitcoins took part in a kind of computational lottery. The faster a computer could run numbers through a complex equation, known as a hash function, the more chances it had to win the lottery, and with it, a bundle of new Bitcoins. By the end of 2012, Bitcoin enthusiasts at home had already found faster and faster ways to do the computations and win more Bitcoins with their existing computer hardware, generally using GPU computer chips made for processing graphics. A few particularly ambitious engineers set out to build so-called ASIC computer chips that could be even more efficient – and designed specifically for Bitcoin mining. In early 2013 the first of these were deployed. Together, the joint computing power of all the machines connected to the Bitcoin network was equivalent to several super computers. It was these computers that were, in essence, securing the network. But the people creating these early ASIC chips were relative amateurs, and Srinivasan thought he could do much better by harnessing some of the top minds in Silicon Valley. In addition to Pauker, he brought on as co-founders the experienced engineers Nigel Drego, who trained at M.I.T., Veerbhan Kheterpal, a PhD from Carnegie Mellon, and Daniel Firu, who had previously been at PDF Solutions. They took their corporate name from the number of Bitcoins that will ultimately be created: 21 million. At that point, in spring of 2013, Srinivasan also began selling the company to the elite investors of Silicon Valley, who were still generally skeptical of Bitcoin. No venture capital firms had made any significant public investments in the virtual currency technology. But Srinivasan had the benefit of a rising Bitcoin price to help his pitch. From the beginning, 21e6 was sold as a top secret project, allowing people to invest without needing to come out as public supporters of Bitcoin. The company was also structured as an limited liability company, rather than the C Corp typical of startups, so that people could invest with their own money. The gallery of 30 or so people who put money in was a who’s who that – in addition to the original PayPal team and Andreessen Horowitz co-founders — included AngelList’s Naval Ravikant and the Winklevoss twins. Together the group put in $5 million for 21e6’s series A round, which closed shortly after Coinbase, another Bitcoin company, won major press coverage for a similar sized fundraising round. For Srinivasan, part of the goal in approaching individual investors was to sell tech leaders on Bitcoin, and get them personally invested in the technology — and he would later say that it worked. “We were pretty influential in getting many of the smart people in Silicon Valley to take Bitcoin seriously,” he told me. It was five months after its series A that the company plugged in its first machines and started mining Bitcoins, and the company soon commanded 3 to 4 percent of all of the mining power worldwide, they told investors. At the normal rate of mining, that would have yielded about 150 Bitcoins a day. This activity coincided with the next big run up in price – as people bought Bitcoins for over $1000 — and again 21e6 struck with investors while they were hot. In December, the company raised $25 million from Andreessen Horowitz, the firm, rather than the firm’s partners. Another $10 million was raised from 21e6’s original investors and another $30 million came in venture debt. At the time, Coinbase, which had recently raised its own $25 million round from Andreessen Horowitz, was heralded as the best-funded Bitcoin company in the world, despite the fact that it had less than less than half as much money as 21e6. The 21e6 investment was attractive in part because venture capital firms generally felt that they couldn’t buy Bitcoins directly. 21e6, on the other hand, offered to pay its investors back with Bitcoin dividends, allowing the firm to get Bitcoins without buying them outright. Andreessen Horowitz was also recruiting Srinivasan to join as a partner, which he did at almost the same time as the investment. In early 2014, a growing army of 21e6 machines was rolled out, first filling up 24 racks in a data center, and then 124 racks – soon in centers that were dedicated to the mission. The company also spent lots of time figuring out a way to submerge the machines in mineral oil, as a way to cool them and cut down on the cost of air conditioning and fans. By the middle of 2014, though, it was clear that a lot of people had invested a lot of money in designing new mining chips back when the price of a Bitcoin had been near $1000. After the collapse of the Bitcoin exchange Mt. Gox, the price had fallen to half that. Many ambitious companies like Hashfast and Cointerra, which were started by high level engineers, neared bankruptcy. This didn’t stop 21e6, which rolled out its second generation chip, known as Gandalf, and was already working on a third generation chip, Yoda. One data center could hold nearly 10,000 machines with these chips. But the epicenter of mining was increasingly moving toward China, where the chips were nearly free and the cost of electricity – often the most expensive cost for Bitcoin miners – could be close to zero if the miner was close with a local authority of someone at a power plant. Nowadays, most mining experts assume that over half of all Bitcoins are mined in China. Srinivasan’s company has not stopped mining – and he says that the company has paid back all of its investors. But when the company’s latest fundraising round was announced, no mention was made of the massive data centers or mineral oil immersion. From Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money by Nathaniel Popper . Copyright © 2015 by Nathaniel Popper. Reprinted courtesy of Harper, an imprint of HarperCollins Publishers. Nathaniel Popper is a reporter at The New York Times.

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