Palantir Denies Ownership Of Quantum Computing Power Bitcoin-Mining Company

David Gilbert

A man walks out of a shop displaying a bitcoin sign during the opening ceremony of the first bitcoin retail shop in Hong Kong, Feb. 28, 2014. Photo: Getty Images/PHILIPPE LOPEZ/AFP

A mysterious bitcoin-mining company based in Hong Kong that is promising to “infuse” the industry with the power of quantum computing claimed this week it is owned by big-data company Palantir Technologies, the secretive data analytics company co-founded by venture capitalist and PayPal co-founder Peter Thiel.

One problem: No one at the Silicon Valley company appears to have heard of CoinFac Ltd. Reached by International Business Times, a Palantir spokesperson said there is simply no connection between Palantir and CoinFac and that the former — recently valued at $20 billion — had already requested the company remove all references to Palantir.

The claim caused a stir this week because Palantir, which in December raised $880 million, works closely with law enforcement agencies to help track terrorists and recently expanded into the financial sector — working with banks and hedge funds to help them process huge amounts of data. The notion that it had invested in a bitcoin-mining operation seemed curious, if not newsworthy.

In addition to claiming Palantir as an investor, CoinFac promised in a press release that those who use its services will be able to take advantage of the huge increases in processing power promised by the advent of quantum computing. Users can pay between 1 bitcoin (currently valued at $450) and 100 bitcoins to rent some of that processing power for a year from CoinFac.

The website says the 50-bitcoin and 100-bitcoin options are sold out, suggesting a number of people have already paid the company $22,500 and $45,000, respectively, to access these services. The company promises to give paying customers access to the power of a quantum computer through the cloud, though it fails to say where the quantum computer is located or who owns it — and considering the only commercially available quantum computer costs around $10 million, this is a significant issue. 

CoinFac claims it will be able to make bitcoin mining 4,000 times faster than the current generation of traditional computers and "bring lucrative mining back into Bitcoin industry.” Currently bitcoin mining is carried out only by dedicated companies — mostly based in China — who invest heavily in computers designed solely to solve the complex equations needed to mine bitcoin.

Palantir is referenced not only in the company’s press release but also at length on CoinFac’s About Us page on its website, again claiming ownership by Palantir, which it says is “well-connected in the banking, venture capital and cryptocurrency industry.”

IBT spoke to someone in Hong Kong answering the phone number given on CoinFac’s website who said a spokesperson was unavailable. An emailed question regarding the claimed Palantir ownership and seeking clarification of how many people have paid for the company’s services had not been answered at the time of publication.

The company’s website claims it was founded by Mike Howzer, described as a “thought leader in the cryptocurrency industry” who was formerly an executive at Google, Intel and Oracle, and “a veteran of Silicon Valley for over 30 years with a strong network and solid relations with entrepreneurs, executives and venture capitalists.”

The biography claims Howzer has been referenced in mainstream media outlets like the Wall Street Journal, the New York Times and BusinessWeek, but an online search for such references in all three publications turned up no results. Indeed, there is no reference to a Mike Howzer as described on CoinFac’s website anywhere online.