EC Professional Bitcoin Mining In China

A Major Mining Operation

Since recovering from a brief plunge to $150 intraday in January, Bitcoin has moved in a trading range roughly between $210 and $270. Most recently the currency traded around $235. As we will explain further below, at what price Bitcoin changes hands may actually be relevant for the sustainability of its crucial infrastructure backbone. Here is an hourly chart of the action on the Bitstamp exchange over the past 10 trading days:

Click on picture to enlarge

Bitcoin hourly. Since the low at $150 in January, the crypto-currency has traded in a range between approx. $210 and $270, via bitcoincharts.com

This brings us to a very interesting video of a major professional Bitcoin mining operation in China that has recently been brought to our attention. As you can see in this video, the days when people could mine Bitcoins at home with a souped-up graphics card are long gone. These days entire floors of buildings stuffed with computing hardware are needed to “mine” a halfway decent amount of Bitcoins (many smaller private miners nowadays join pools which share the Bitcoin found by communal effort whenever a member of the pool manages to solve a block of the Bitcoin block chain).

The reason why such huge operations are necessary for Bitcoin mining these days is that the complexity of the calculations required to solve the mathematical puzzle that leads to the discovery of new Bitcoins continually increases the more miners are active.

The operation in China presented in the video consists of six sites, that have together managed to mine a little over 4,000 Bitcoins per month as of October 2014 and represent approx. 3% of the global network’s computing power. 3,000 individual dedicated mining machines per site manage to mine between 20-25 Bitcoins per day. Each site requires some 1,250 kWh in electrical power per month.

However, there are a number of other costs as well: rent must be paid, there are employees on the sites who need to watch for equipment breakdowns or other problems and if necessary perform repairs, and a lot of equipment in fact needs to be replaced on a regular basis. By now the operation has a huge graveyard of discarded hardware.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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