Anyone who’s tried to buy or mine bitcoin almost immediately finds out what they’re up against.
No matter how many rigs you can afford to invest in, you’ll soon come to the conclusion that you need to join a much larger pool to get tangible dividends.
Then there’s this option, which Jacob Smith recently came across in rural China:
Smith is the editor of cryptocurrency blog The Coinsman. He’s based in Beijing and dedicates his site to “the ones who believe that Bitcoin is a revolutionary technology 40 years in the making that’s going to disrupt finance and government as we know it”.
He graciously let Business Insider grab a piece of his amazing pictorial of his trip.
It’s a massive mining operation run by just three guys. For an idea of just how big an operation it is, the power bill alone is in excess of $US60,000 per month.
Smith said after being met at the airport, he was driven an hour into the countryside to a giant warehouse.
The first thing you notice, he says, is the noise of tens of thousands of tiny ASIC chips hashing away.
“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,” he says, then offers this soundbite:
Then comes the wind from giant cooling fans, and despite their efforts, heat. Smith says the inside of the farm still manages to hold “steady at 40° Celsius (105° f) the entire time”.
The mining is done by Avalon machines, which quickly date and as such, are unprofitable to run, Smith said. Here’s the result:
All up, there’s 2500 machines functioning at any one time, churning out 230 billion calculations per second, per unit. The maths is extremely rubbery, as returns are based on many variables including the cost of power, but in Australia, that would generate at least $6,500 a week.
Currently, you can buy a rig that returns a single bitcoin every nine days for around $2500.
There’s many more – and more sophisticated – giant operations around the world, including this one in Washington, USA, which generates about $US8 million a month.
It’s unlikely the Washington operation can claim the same reduction in overheads as this Chinese farm. Smith met the three employees, whom he said live onsite and get 4 or 5 days a month to go home.
They have “a couple of bitcoin” each for their efforts (Smith says they’re “heroes that keep our precious bitcoin network safe”). They spend most of their time checking, wiring, installing and rearranging – or playing video games.
It’s a crazy amount of work for just three guys. Look at the amount of cabling in this shot alone:
Check out Smith’s post at The Coinsman for the full story and more pictures. It’s incredible and a stark reminder for anyone getting in late into the game of what they’re up against.
Which, according to Smith, is not a bad thing. As he says:
“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.
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.”
More stories from The Coinsman:
- The Government Should Stop Trying To Protect Banks From Bitcoin
- An Interview With Shawn Wilkinson Of Storj
- My Trip To Europe, Funded Entirely By Bitcoin
- An Interview With Blockchain’s Former Head Of Technical Development
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