Imagine if you lived life as a one of the four Bitcoin enthusiasts and miners in Northern China. Your government isn’t a big fan of an unsanctioned global currency like Bitcoin seeping into the Chinese market but isn’t standing its way right now. They reserve the right to shut you down at any time. Internet access is extremely limited to the proletariat, but the more money you have, the more you can get. You and your government see visions for your economic future, and they couldn’t be more divergent. You hold your economic freedom in your hand or your servers. Your government holds you in their control. And you hold Bitcoin’s Chinese market in your control, to an extent. 3% of all the Bitcoin CPU power within the entire worldwide network is yours, as you own six ultra-productive mining sites. And you believe this is just the beginning.
Motherboard gained exclusive access to a secret Bitcoin mine housed within an old factory in the Liaoning Province in rural northeast China. Foreign access to the mine was only allowed under one condition: The details of the operation’s ASIC miners, or who supplies them, could never be revealed to the masses. The mine is one of six owned by a group of four owners. As of the time of this revelation, over 3000 Bitcoins were mined there, at their peak, which would currently be worth almost one million US Dollars. Despite its dystopian appearance, the group’s six mining facilities generate eight petahashes of computing power. Given the amount of the market this group controls, if you’ve bought or sold any Bitcoin recently, you might have them to thank, in some small way, for your ability to obtain Bitcoin.
As a miner in their network, you live in their mining facilities, heading home for less than a week out of every month. In the summer, dozens of industrial-grade cooling fans are constantly heard working to keep a proper working temperature for the three thousand ASIC Mining computers whose only job is to mine Bitcoins 24 hours a day. With so many computers on hand, think of it as having thousands of people in a group you control, buying lottery tickets for your favorite lottery. You will win often enough if you can control the overhead. Electricity alone is over $80,000 a month, with thousands of miners working at each site, non-stop.
As a live-in miner, you are responsible for maintaining the right overall hash rate for optimal performance. Also monitoring the fans and operating performance of each computer, the fans for the site, and the repairing any mining computer that is still useful. Obviously, a high degree of computer knowledge is needed to be a miner of such a facility. Understanding Bitcoin is less of a priority and can be learned on the job.
“I believe that Bitcoin will be the currency of the future,” says Jin Xin, one of their Site Managers. “It can’t possibly replace the current financial system, but the financial system is heading in that direction. Right now, the Chinese government neither supports nor opposes it. As long as the Bitcoin market operates safely and legally, I think that the Chinese government will come to support Bitcoin in the future.”
It is good to hear first-hand that China has taken a laisse-fair approach to Bitcoin for the time being. Late in 2013, when it first hit the scene, I think it scared them, and they overreacted to its popularity. With their reputation for anything non-State controlled or Internet-related, you must think the Sword of Damocles is hanging over you every minute.
Maybe the government is more concerned with bigger fish to fry. Like their pursuit of ever greater gold reserves to build a Gold-backed Global Reserve Currency, replacing the US Dollar, and under their control. For the time being, it is good to be a Chinese Bitcoin mega-miner.
Image from Wikimedia.commons
Would you like to work 3 weeks a month at a Bitcoin mine? Is mining now just for the well-funded corporations at this point? Share above and comment below.