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Inside a Chinese Bitcoin Mine

Discussion in 'CryptoCurrency' started by M4XW3LL, Aug 20, 2014.

  1. M4XW3LL

    M4XW3LL Senior Member

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    • [*=center]By Bitsmith
      [*=center] Mon, Aug 11, 2014
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    This week I traveled to northeast China to check out a bitcoin mining operation. After being received at the airport, my contact drove me for nearly an hour to a part of the country more remote than I was expecting. This was my first time checking out a mining operation of this size, so I don’t really know what I was expecting, but I was definitely surprised by how off the beaten path it was.
    The surrounding countryside seemed to be mostly industrial and agricultural.

    [​IMG]
    The first thing you notice as you approach the warehouse is the noise. It begins as soon as you step out of the car, at which point it sounds like massive swarm of angry bees droning away somewhere off in the distance. It becomes louder and louder the closer you get to the building, and as you step through the doors it becomes a deafening and steady roar; a combination of tens of thousands of tiny ASIC chips hashing away, and dozens of large industrial fans serving to cool down the “workers”. I recorded a bit of the sound:

    The next thing that hits you as you enter is the wind. The deeper into the building I walked, the more powerful the gust became, coming from behind me and rushing past, across the giant warehouse floor full of machines.
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    The third thing that hits you is the heat. Despite the massive and powerful air current created by these massive industrial fans, the inside of the mining farm still manages to hold steady at 40° Celsius (105° f) the entire time.
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    Fans EVERYWHERE.
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    As old hardware becomes dated and unprofitable to run, it really piles up. There’s retired old Avalon machines all over the place.
    [​IMG]
    This is where Avalon machines go to die, apparently.
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    The chips are no longer cost-effective to mine for bitcoins with, but the power supply units inside can be stripped out and reused.
    [​IMG]
    The mining operation resides on an old, repurposed factory floor, and contains 2500 machines hashing away at 230 Gh/s, each. (That’s 230 billion calculations per second, per unit).
    [​IMG]
    The place consumes a massive amount of electricity. The operators told me that the power bill of this specific operation is in excess of ¥400,000 per month (that’s about $60,000 USD).
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    The farm employs three people whose job it is to monitor the machinery and make sure that all the machines are working properly. They work around the clock, in three shifts, and do a walkabout of the floor once per hour to check everything. The picture below is of their office. The curtain was blowing madly the whole time due to the massive airflows through the warehouse.
    [​IMG]
    The guys told me that in the time that they are not busy checking machines, rearranging wires, installing new hardware or dealing with retired hardware, that they watch movies and play video games. One of the guys says he’s been enjoying a Korean game called TERA recently.
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    The guys live here mostly full time, going home for 4 or 5 days once a month. They sleep on the premises.
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    All three of the guys that work there are coinsmen themselves, although none of them said they had more than just a couple of bitcoins. One of the guys said that he even has a couple of smaller mining rigs hashing away for himself back home.
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    There’s so many old machines lying about that they even use them as doorstops.
    [​IMG]
    There’s also lots and lots of cables.
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    And finally, here’s the heroes that keep our precious bitcoin network safe. Eyes censored for dramatic effect.
    [​IMG]
    Getting the opportunity to visit this mining operation was very eye-opening for me. Walking around the warehouse floor, I was struck with a feeling of awe that THIS is what keeps bitcoin alive. That even if someone wanted to bring down bitcoin, they’d have to outdo these guys and the dozens of other operations like this around the world. The decentralized nature of it all… that this is just one operation among many, run by different operators in different countries around the world. This really drove home that bitcoin can’t be killed by decree. Make it illegal in one country and people like this will keep hashing away in others.
    This is a far cry from the small-time home miners of the not-too-distant past. Not even two years ago I knew a guy mining tons of coins per day with just a couple dozen GPU units in his bedroom.
    The other feeling I got while there is that this is kind of a libertarian fantasy for many. These guys are performing a valuable service and getting paid well for it. Too many in the world get paid well at the expense of others, or dedicate their lives to giving back to society without a penny in return, but mining farms like these are participating in the economy in a purely capitalist way (and the good kind of capitalism, not “socialism-for-banks-but-we’ll-call-it-capitalism-anyways”).
    [HR][/HR]
    This exclusive report was entirely self-funded.

    Source: http://www.thecoinsman.com/2014/08/bitcoin/inside-chinese-bitcoin-mine/
     
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  2. Reyone

    Reyone Elite Member

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    Awesome post man; I could have never pictured it like that :)

    So, spending about $80k/pcm, how much are they generating?
     
  3. JoeMongan

    JoeMongan Jr. VIP Jr. VIP Premium Member

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    What can I say this is freaking awesome! Not meaning to put your post down and a tip sounds nice
    but I do believe it's against the forum rules mate. :)

    -RK
     
  4. ardley216

    ardley216 Elite Member

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    YEah I wonder how much they are generating.. cos thats insane!!! Im sure with that hardware there are more profitable things you can do
     
  5. M4XW3LL

    M4XW3LL Senior Member

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    Thanks for the warning mate, but I don't understand why would be this against the forum rules?
     
  6. natnapil

    natnapil Newbie

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    wow great read! thank you!!! this is awesome.
     
  7. Apricot

    Apricot Administrator Staff Member Moderator

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    You would think they would chuck the old machines on eBay or something.

    (Moved to Cryptocurrency section)
     
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  8. prab1996

    prab1996 Elite Member

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    Move it to btc forum. This is lounge.
    - = -
     
  9. M4XW3LL

    M4XW3LL Senior Member

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    Mr Apricot already moved it
     
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  10. JoeMongan

    JoeMongan Jr. VIP Jr. VIP Premium Member

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    Nice try! After WizGizmo tricking me into thinking there's a new section I will not be duped again. :p
     
  11. Trepanated

    Trepanated Supreme Member

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    Asking for 'thanks' for a post is frowned upon.

    Why do you think asking for money is OK?

    Although your post is interesting, if everyone started asking for donations every time they posted something interesting, the place would be a mess.
     
  12. M4XW3LL

    M4XW3LL Senior Member

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    Oh I see, that's not mine lol. It was in the article, if you open the link article you can see it.
     
  13. JoeMongan

    JoeMongan Jr. VIP Jr. VIP Premium Member

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    If you can still edit the original post I would take that out before you get flamed for it bud. :)

    -RK
     
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  14. prab1996

    prab1996 Elite Member

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    I was on mobile. (and it took me 10 mins to read)

    After doing some calculations i found that they are mining about 12-15 bitcoins per day and about 470 bitcoins per month,So they are earning decent money even after paying $60k for electricity.
    -=-
     
  15. Trepanated

    Trepanated Supreme Member

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    I calculated around 360 BC per month, but that's still a profit of well over $100K per month after power costs.

    Even after the difficulty increases in a couple of weeks they will still be clearing almost $100K.

    Fair play to them - you have to speculate to accumulate, as they say.
     
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  16. ma57er

    ma57er Newbie

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    Watch the video with biggest mining operation in US:

    youtube. com/watch?v=5CjldZLXiAU - fix the URL, because i cant post direct links :)

    In the video you can hear what bucks they makes "About 8 millions month" :cool:
     
  17. jak19

    jak19 Elite Member

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    what sort of hardware costs are we looking at?
     
  18. Commoner

    Commoner Power Member

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    Hi FisnikS,

    Thank-you, thank you very much for such an eye opener article! I was utterly impressed by the sheer amount of hardware as the risks are too much for me to handle! In fact, kudos to the article writer, traveler as well as the business owner(s) willing to share these profitable pie.

    Warmest Regards,
    Commoner
     
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  19. M4XW3LL

    M4XW3LL Senior Member

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    You're welcome mate. I always try to share with the community things that are worth reading :)
     
  20. NameHere

    NameHere Newbie

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    Algorithms that give you a virtual representation of value. Back To The Future couldn't have ever imagined somethinglike this.