Topic: [2017-08-17] The lives of bitcoin miners digging for digital gold in Inner... (Read 3230 times)

The lives of bitcoin miners digging for digital gold in Inner Mongolia

A decade ago, after a speculative coal boom fizzled, the once-thriving desert city of Ordos, in Inner Mongolia, became China’s largest ghost town, littered with unfinished or empty buildings and desperate for another way to make money. Blessed like most of China with cheap labor, land, and, most important, cheap electricity, Ordos threw open its doors to all-comers, including bitcoin, the stateless digital currency whose total market value has more than quadrupled this year to $70 billion, and whose ability to act as a kind of digital gold has captured the imaginations of governments, big banks, and small entrepreneurs.
Today, Ordos (population 2 million) has emerged as a center of bitcoin mining, the process of approving transactions and creating new coins in the digital currency’s system. Over half the world’s major bitcoin mining pools—groups of miners who agree to add up their resources to improve their odds of finding bitcoin—are located in China, according to a research paper (pdf, p. 91) by the Cambridge Centre for Alternative Finance. That has made China a dominant force in a new industry that may one day define how global transactions are ordered.

Located in a decaying industrial park on the outskirts of town, the mine employs about 50 and consists of eight single-story, warehouse-like buildings, each 150 meters (492 feet) long. Seven of them host 21,000 machines that, together, represent nearly 4% of the processing power in the global bitcoin network. The other hosts 4,000 machines dedicated to litecoin, an alternative digital currency that’s been rising in price in recent months. Next to the warehouse buildings sits a three-story office with a canteen and dormitory for the mine’s workers.

This month, Quartz took a tour of the mine and spoke with its employees. Working in such a place can be both tedious and surreal. But the work is less physically demanding—and the clean, temperature-controlled environment is less hazardous to workers’ health—than at many jobs in the area, where the economy is driven by coal mining and industries like aluminum smelting and chemical engineering. China’s largest open-pit coal mine, Haerwusu, lies about 125 miles (200 km) from the industrial park. In 2012, before coal prices began to plummet, Ordos accounted for a fifth of the country’s coal output.
While many local coal mines closed after prices dropped, the area remains notable for cheap, abundant, coal-powered energy, which helps explain the presence of a sprawling, electricity-hungry bitcoin operation in what feels like the middle of nowhere.
Investing in bitcoin is “just a gamble”

The mine is run by a subsidiary of Beijing Bitmain Technologies, based, as the name suggests, in China’s capital, about 400 miles (644 km) to the east. In 2015, Bitmain took over the mine from its previous owner, who launched the operation in 2014. Bitmain claims that it is the world’s oldest large-scale bitcoin mine. In addition to running mines, Bitmain makes the machines—basically single processors in small, connected boxes—that mine for bitcoin. The company also operates Antpool, the world’s largest mining pool.
The 50 Ordos residents who work at the mine are mostly in their twenties and they tend to the machines that generate cryptocurrency for clients. Few have expertise in bitcoin, but many have invested in cryptocurrencies nevertheless.

full: https://qz.com/1054805/what-its-like-working-at-a-sprawling-bitcoin-mine-in-inner-mongolia/