Skip to headerSkip to main contentSkip to footer
The Week Logo
Subscribe & SaveSubscribeSubscribe to The Week magazine and save.
Give a GiftGive a Gift
  • Politics
  • Culture
  • Business
  • Personal finance
  • Cartoons
    • Tech
    • Speed Reads
    • Photos
    • Puzzles
    • Books
    • Briefings
    • Instant Opinion
    • Pros and Cons
    • Where They Stand
  • Magazine
  • Newsletters
Skip advert

Inside a secret Chinese bitcoin mine

Bitcoins may be virtual currency, but they're still operated and maintained in a physical space. Step into a bitcoin mine.

Picture of Kelly Gonsalves
by Kelly Gonsalves
August 28, 2017

EPA/LIU XINGZHE/CHINAFILE

(EPA/LIU XINGZHE/CHINAFILE)Much of bitcoin's allure comes from its intense level of decentralization. But like any monetary system, bitcoin still requires checks and balances, validation and verification.That's where "mining" comes in.Bitcoin users are tasked with keeping their own ledger of every single transaction that occurs in the system, including the ones they're not involved in. To keep everyone's records updated and in sync, thousands of power users — called "miners" — confirm each transaction's validity in real time, essentially by solving complicated algorithms. Miners then send out the verified information to the network.Mining is a competition, of sorts. Miners use special computer programs to solve the series of codes and functions that make up the highly encrypted transaction data. The first person to get through is rewarded with new bitcoins. Notably, solving the functions relies more on chance and processing power than the miner himself, making it more of a lottery than a math test.So to be successful, a bitcoin miner needs two things: an array of supercomputers and the massive amount of electricity needed to fuel them.That's why despite bitcoin's global accessibility, China has emerged as the cryptocurrency's leader. By manufacturing most of the world's mining equipment and building massive mines that take advantage of cheap electricity, China has more bitcoin processing power than any other country, by a huge margin.

(EPA/LIU XINGZHE/CHINAFILE)The global "capital of bitcoin mining" is China's Sichuan province, thanks to its abundance of hydropower plants and some of the world's cheapest electricity. Bitcoin mines there can gross millions per year — all of it outside of government control.But because the industry exists in a bit of a legal gray area, the mines are often shrouded in secrecy — locations are concealed and visitors are severely restricted.That's especially true now that the Chinese government has started to clamp down on bitcoin mines. To get a piece of the action, the state has introduced trading fees and rules to restrain users. Some bitcoin mines have begun to mysteriously shut down or relocate their operations.But in September 2016, European Press Agency photographer Liu Xingzhe visited a mine built next to an undisclosed power plant deep in Sichuan; the nearest public transportation was almost 20 miles away. The mine had 550 machines running 24 hours a day and was operated by a handful of employees who lived on site and worked on behalf of clients all around the world.Below, take a tour of this secret bitcoin mine:

Skip advert

The winding road to the bitcoin mines deep in Sichuan province.

(EPA/LIU XINGZHE/CHINAFILE)

Skip advert

A bitcoin mine with a blue roof sits next to a hydropower plant in Sichuan.

(EPA/LIU XINGZHE/CHINAFILE)

Skip advert

Goats from a nearby village walk by the mine's cooling fans.

(EPA/LIU XINGZHE/CHINAFILE)

An employee walks through aisles of mining machines.

(EPA/LIU XINGZHE/CHINAFILE)

Skip advert
Skip advert

(EPA/LIU XINGZHE/CHINAFILE)

An employee works on assembling a calculation board.

(EPA/LIU XINGZHE/CHINAFILE)

Skip advert

A miner meets with clients.

(EPA/LIU XINGZHE/CHINAFILE)

Skip advert

Discarded mining machine boxes pile up in one of the mine's dormitory rooms.

(EPA/LIU XINGZHE/CHINAFILE)

Skip advert

A miner sleeps in his dorm at the mine.

(EPA/LIU XINGZHE/CHINAFILE)

Mine employees use their phones to play games and watch TV outside the mine.

(EPA/LIU XINGZHE/CHINAFILE)

Skip advert
Skip advert
Share on FacebookShare on TwitterShare via Email
  • Tech
  • Business
  • World

Recommended

Moguls: Tesla's chief ratchets up the risks
Elon Musk.
Feature

Moguls: Tesla's chief ratchets up the risks

10 things you need to know today: January 28, 2023
Former President Donald Trump.
Daily briefing

10 things you need to know today: January 28, 2023

Why (some) Republicans want a national sales tax
Shopping cart.
Briefing

Why (some) Republicans want a national sales tax

Is Meta's decision to bring back Trump dangerous or overdue?
Donald Trump's Facebook page.
Picture of Harold MaassHarold Maass

Is Meta's decision to bring back Trump dangerous or overdue?

North Korea imposes 5-day lockdown on capital to fight 'respiratory illness'
North Koreans walk in Pyongchang.
sure ...

North Korea imposes 5-day lockdown on capital to fight 'respiratory illness'

Former U.S. generals explain how U.S. and German tanks can help Ukraine
Leopard 2 battle tanks
Many tanks

Former U.S. generals explain how U.S. and German tanks can help Ukraine

Can climate change lose Russia the war in Ukraine?
A destroyed Russian tank
Briefing

Can climate change lose Russia the war in Ukraine?

Why Turkey is blocking NATO's expansion
Turkey, Finland, and Sweden.
Briefing

Why Turkey is blocking NATO's expansion

Most Popular

The big debate about alcohol
Alcohol.
In depth

The big debate about alcohol

Andrea Riseborough's Oscar nomination sparks Academy scrutiny
Andrea Riseborough
andrea fallborough?

Andrea Riseborough's Oscar nomination sparks Academy scrutiny

Durham's criminal investigation reportedly involved Trump, not the FBI
John Durham
Plot Twist

Durham's criminal investigation reportedly involved Trump, not the FBI

Skip to headerSkip to main contentSkip to footer
  • Contact Us
  • Privacy Policy
  • Cookie Policy
  • Kiplinger
  • The Week Junior
  • MoneyWeek
  • The Week UK
  • Subscribe
  • Subscriber Login
  • Give a gift
  • Classroom subscriptions
  • Customer Services
  • Terms & Conditions
  • Accessibility
  • Ad info
  • Newsletters
  • Privacy Preferences
  • Do Not Sell My Information

The Week™ is part of Future plc, an international media group and leading digital publisher. Visit our corporate site at https://futureplc.com
The Week™ is a registered trade mark.
© Future US LLC, 10th floor, 1100 13th Street NW, Washington, DC 20005. All rights reserved.

Follow us on FacebookFollow us on Twitter
Skip advert