Take a Chinese bitcoin mining tour

Jan 17, 2018 by

Take a Chinese bitcoin mining tour

Bitcoin is a virtual currency devised by the mysterious Satoshi Nakamoto as a revolutionary monetary system independent of central banks and governments.

The currency is booming as an investment asset and form of payment in China, Japan and South Korea. The value of one bitcoin exceeded $12,000 in January.

China is one of the main exchange markets of bitcoin, although the currency exists in a legal limbo and is prone to speculation.

The country hosts some of the biggest “mining pools” in the world where clusters of supercomputers mint new bitcoins and maintain the system. Some of these supercomputers are installed in rural places close to power plants.

One such area is Sichuan, which has quietly become known as “the capital of bitcoin mining”.

Entrepreneurial Chinese set up mines in the province due to its abundance of hydropower, perfect for the high energy needs of the computers required for bitcoin mining.

Bitcoin mines are buildings equipped with massive numbers of microprocessors where miners solve complex maths problems and are rewarded in the digital currency.

They are often built beside hydroelectric plants set up along mountain streams. These plants often produce more energy than they can sell to China’s state grid, and some plant owners have found they can either sell the surplus to bitcoin mines or set up their own mines.

The industry operates in a legal grey area in China outside the conventional Chinese financial system.

The miners in this story, concerned about attention from the government, declined to have their full names or work locations mentioned in the story. They live and work at the mine, which is so remote the nearest public transportation is 20 miles away in the nearest town. Workers pay for rides there once a week.

“The good thing is, there isn’t anywhere to spend money, so you can save your whole salary,” bitcoin miner Sun says.

Bitcoin mine owner Liu, 29, stands in front of a wall of cooling fans at his mine where he houses and operates mining machines for those who do not want to move to rural Sichuan. [EPA/Liu Xingzhe/CHINAFILE]

Bitcoin mine owner Liu, 29, stands in front of a wall of cooling fans at his mine where he houses and operates mining machines for those who do not want to move to rural Sichuan. EPA/Liu Xingzhe/CHINAFILE
Tibetan bitcoin mine manager Kun walks between aisles of mining machines. Kun is the mine's manager as well as one of its investors. He learned about bitcoin through a friend and started investing in 2015. [EPA/Liu Xingzhe/CHINAFILE]

Tibetan bitcoin mine manager Kun walks between aisles of mining machines. Kun is the mine’s manager as well as one of its investors. He learned about bitcoin through a friend and started investing in 2015. EPA/Liu Xingzhe/CHINAFILE
Bitcoin miner Liu, left, meets with clients. He moved from Henan province to Sichuan province in 2015 for cheaper electricity. Now, he manages more than 7,000 mining machines. Meanwhile, his clients can monitor the machines' operation and bitcoin earnings remotely using apps and mobile phones. [EPA/Liu Xingzhe/CHINAFILE]

Bitcoin miner Liu, left, meets with clients. He moved from Henan province to Sichuan province in 2015 for cheaper electricity. Now, he manages more than 7,000 mining machines. Meanwhile, his clients can monitor the machines’ operation and bitcoin earnings remotely using apps and mobile phones. EPA/Liu Xingzhe/CHINAFILE
Packing boxes for mining machines pile up in an employee dormitory at a bitcoin mine. Manager Kun purchased new AntMiner S7 ($490) mining machines in May 2017. Some 550 mining machines, running 24 hours, can mine 2.5 bitcoins a day, worth around $6,400. [EPA/Liu Xingzhe/CHINAFILE]

Packing boxes for mining machines pile up in an employee dormitory at a bitcoin mine. Manager Kun purchased new AntMiner S7 ($490) mining machines in May 2017. Some 550 mining machines, running 24 hours, can mine 2.5 bitcoins a day, worth around $6,400. EPA/Liu Xingzhe/CHINAFILE
A bitcoin miner rests in his dormitory at a bitcoin mine. 'The good thing is, there isn't anywhere to spend money, so you can save your whole salary,' bitcoin miner Sun says. [EPA/Liu Xingzhe/CHINAFILE]

A bitcoin miner rests in his dormitory at a bitcoin mine. ‘The good thing is, there isn’t anywhere to spend money, so you can save your whole salary,’ bitcoin miner Sun says. EPA/Liu Xingzhe/CHINAFILE
A bitcoin mine next to a hydroelectric power plant in Ngawa (Aba) Tibetan and Qiang Autonomous Prefecture in Sichuan province. Electricity typically accounts for 60-70 percent of a bitcoin mine's expenses. [EPA/Liu Xingzhe/CHINAFILE]

A bitcoin mine next to a hydroelectric power plant in Ngawa (Aba) Tibetan and Qiang Autonomous Prefecture in Sichuan province. Electricity typically accounts for 60-70 percent of a bitcoin mine’s expenses. EPA/Liu Xingzhe/CHINAFILE
Goats from a nearby village walk next to the cooling fans of a bitcoin mine. China is one the main exchange markets for bitcoin although the digital currency exists in a legal limbo and is prone to speculation. The country hosts some of the biggest 'mining pools' in the world, clusters of supercomputers that mint new bitcoins and maintain the system. [EPA/Liu Xingzhe/CHINAFILE]

Goats from a nearby village walk next to the cooling fans of a bitcoin mine. China is one the main exchange markets for bitcoin although the digital currency exists in a legal limbo and is prone to speculation. The country hosts some of the biggest ‘mining pools’ in the world, clusters of supercomputers that mint new bitcoins and maintain the system. EPA/Liu Xingzhe/CHINAFILE
An employee at an undisclosed hydroelectric power plant checks electric generators. [EPA/Liu Xingzhe/CHINAFILE]

An employee at an undisclosed hydroelectric power plant checks electric generators. EPA/Liu Xingzhe/CHINAFILE
Employees work on an assembly line of AntMiner S9 mining machines at Bitmain's manufacturing base, Shenzhen, China. [EPA/Liu Xingzhe/CHINAFILE]

Employees work on an assembly line of AntMiner S9 mining machines at Bitmain’s manufacturing base, Shenzhen, China. EPA/Liu Xingzhe/CHINAFILE
An employee puts labels on AntMiner S9 mining machines. The AntMiner S9 is the most efficient mining machine on the consumer market right now and is produced by a Chinese company called Bitmain. Its current cost is $1,113. Due to the high price of bitcoin, it has been out of stock for a long time. [EPA/Liu Xingzhe/CHINAFILE]

An employee puts labels on AntMiner S9 mining machines. The AntMiner S9 is the most efficient mining machine on the consumer market right now and is produced by a Chinese company called Bitmain. Its current cost is $1,113. Due to the high price of bitcoin, it has been out of stock for a long time. EPA/Liu Xingzhe/CHINAFILE
Employees work at the BTCChina office, in Shanghai's financial district. BTCC was founded in 2011 and is now one of China's largest bitcoin exchange platforms. According to its CEO Bobby Lee, Chinese people like the 'online gambling' feel of bitcoin's instability; also, with the Chinese government's restrictions on many investment channels, people welcome new ways to invest their money. [EPA/Liu Xingzhe/CHINAFILE]
Employees work at the BTCChina office, in Shanghai’s financial district. BTCC was founded in 2011 and is now one of China’s largest bitcoin exchange platforms. According to its CEO Bobby Lee, Chinese people like the ‘online gambling’ feel of bitcoin’s instability; also, with the Chinese government’s restrictions on many investment channels, people welcome new ways to invest their money. EPA/Liu Xingzhe/CHINAFILE

Reprinted from ALJAZEERA

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