World’s biggest mining pools: Inside Chinese Bitcoin mines (The capital of bitcoin mining)

epa06062672 (01/26) Bitcoin mine owner Liu, 29, stands in front of a wall of cooling fans at his mine where he houses and operates mining machines for miners who do not want to move to rural Sichuan, in Ngawa Tibetan and Qiang Autonomous Prefecture, Sichuan province, China, 27 September 2016. China, the world's leader in Bitcoin mining, is dominating both the currency's generation and the global trade in the currency. Sichuan has become known as 'the capital of bitcoin mining' as entrepreneurial Chinese set up 'mines' there due to its abundance of hydropower, perfect for the high electricity needs of the large number of computers required for Bitcoin mining. Bitcoin mines are buildings with warehouse-like structures equipped with massive numbers of microprocessors with which 'miners' solve complex math problems and are rewarded in the digital currency. The industry exists in a legal gray zone in China, and the miners in this story, concerned about attention from the government, asked not to have their full names or the names of the villages where their mines are located mentioned in this story. EPA/LIU XINGZHE/CHINAFILE ATTENTION: For the full PHOTO ESSAY text please see Advisory Notice epa06062671

Bitcoin was invented by Satoshi Nakamoto (Unknown). Ever since then, it is revolutionizing the entire financial system of the world. Even banks and government institutions are not sure how to react to the increasing dominance of Bitcoin.

One of the unique features of a Bitcoin is the fact that it can be easily mined by the institutions as well as by retail investors using the right kind of technology. Owing to this very reason, there are plenty of Asian countries where there are huge mining operations being undertaken. One such country is China. China is one of the largest miners of Bitcoin.

According to Al Jazeera, Owing to the large-scale availability of resources as well as electricity in the country, there are plenty of large mining tools which are being used to generate Bitcoins. Most of these mining tools are actually located in the rural area where they are able to access the power plants quite easily as well. In these areas, the electricity is also on the affordable side which reduces the cost of mining. The main cost of mining is the electricity as it can constitute up to 70% of the overall cost. This is one of the main reasons why the mining operations are coming up in the rural areas.

An employee resembles calculation board at a Bitcoin mine in Sichuan Province, China, 27 September 2016. China, the world’s leader in Bitcoin mining, is dominating both the currency’s generation and the global trade in the currency. Sichuan has become known as ‘the capital of bitcoin mining’ as entrepreneurial Chinese set up ‘mines’ there due to its abundance of hydropower, perfect for the high electricity needs of the large number of computers required for Bitcoin mining. Bitcoin mines are buildings with warehouse-like structures equipped with massive numbers of microprocessors with which ‘miners’ solve complex math problems and are rewarded in the digital currency. The industry exists in a legal gray zone in China, and the miners in this story, concerned about attention from the government, asked not to have their full names or the names of the villages where their mines are located mentioned in this story.

China has plenty of hydropower plants which are able to produce affordable electricity. Moreover, in China, there are manufacturing plants which not only develop computers but also microprocessors which are actually needed for the mining of Bitcoin. Therefore, each and every resource which is needed in order to mine Bitcoins is actually available in China. This is one of the main reasons why some of the largest mining operations in the world are run in China.

Moreover, the labor in China is pretty cheap. The employees attending to these mining rigs often stay in the premises of the mining operation. This ensures that they are able to monitor the mining operations around the clock which lead to greater efficiency.

Thus, as all the resources are present in the country itself and when you couple this with cheap labor as well as cheap electricity, all the ingredients which are needed in order to run some of the biggest mining operations are available in China. Moreover, as the price of Bitcoin rises, the margin of profit is increasing significantly for the Chinese mines as well. This is a resulting in even more mines being set up in rural China in order to tap into this unique opportunity.

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