
Photos: Life inside of China’s massive and remote Bitcoin mines - urahara
https://qz.com/1026605/photos-chinas-bitcoin-mines-and-miners/
======
bpodgursky
If you have even the slightest concern about global warming or the environment
overall, you should consider Bitcoin a horrible mistake we should be trying to
eradicate.

It's a currency backed by willingness to waste electricity doing useless work.
And worse, as it gets more popular, the willingness and price will continue to
drive higher.

Hopefully China recognizes that this is in odds with their efforts to clean up
their environment, and crushes Bitcoin fast before the damage is too
catastrophic.

~~~
elif
How does your categorical criticism not also apply to things like barbie-doll
manufacturing facilities?

Also, it does not take into account the potential for value being removed from
dollars (denominator and subsidizing currency of big oil, big war, big agra,
etc.) and being given irrevocably to the proletariat who are actually
concerned about climate change.

~~~
puranjay
> irrevocably to the proletariat

Yes, a currency that is so hard to understand that even seasoned technocrats
can't figure it out is perfect for the proletariat.

Cryptocurrencies are yet another example of wealth transfer from educated
elite to another educated elite. There is nothing "democratic" about it.

It requires a tech expertise which 95% of the planet doesn't have to even
accept/make a payment. Forget about "mining" it - 99.5% of the world's
population doesn't have the knowledge or the resources for it.

~~~
verroq
Computers at some point was technology that 95% of the planet doesn't
understand.

~~~
y4mi
Do you consider accessing Facebook as 'understanding computers'? If not, this
number hasn't changed that much...

~~~
rublev
Do you consider having a wallet as 'understanding bitcoin'? If not, this
number hasn't changed that much...

We can do this all day. You don't need to understand anything other than
downloading a wallet, storing your coins there, and being able to send them
anywhere instantly.

~~~
bduerst
Except bitcoins are not instant, and aren't even guaranteed to go through.

The transactions are also non-refundable and pseudo anonymous, unlike the
payment methods in your wallet. This is not a feature.

Making analogies with computers and smart phones and wallets doesn't mean
Bitcoin is guaranteed to be successful or mass adopted.

------
stablemap
The original piece in _ChinaFile_ has more pictures from Liu and a similar
amount of context.

[http://www.chinafile.com/multimedia/photo-gallery/inside-
wor...](http://www.chinafile.com/multimedia/photo-gallery/inside-world-of-
chinese-bitcoin-mining)

~~~
eatbitseveryday
I am unable to identify where the photos are in this page. Have they been
taken down? I've tried multiple browsers.

~~~
Sleeep
They are still right there, front and center. Do you have a work filter that
might be blocking them?

~~~
eatbitseveryday
Interesting. I am using my home network, and after connecting with a VPN, I am
able to see the images.

~~~
Sleeep
Yeah, that's certainly weird.

My work has websense and I've seen it before that it silently doesn't load
some content on a page when that content was loaded from another domain (which
was blocked) which can be confusing, which is why I suggested that. But upon
further investigation it looks like this page is loading images from it's own
domain.

------
teknologist
Vice produced a video called "Life Inside a Chinese Bitcoin Mine" which
complements these photos with a bit of an eerie audio/visual experience.

The noise of these machines is incredibly loud and annoying even in the edited
video and the people running these things essentially live in squalor.

[https://video.vice.com/en_us/video/life-inside-a-chinese-
bit...](https://video.vice.com/en_us/video/life-inside-a-chinese-bitcoin-
mine/55b910f39820ecc47f68c306)

Non-Flash:
[https://www.youtube.com/watch?v=K8kua5B5K3I](https://www.youtube.com/watch?v=K8kua5B5K3I)

------
5trokerac3
This is the first article I've read that really made me feel that we live in a
dystopia, instead of it being something on the horizon.

These photos are straight out of a cyberpunk comic.

~~~
austenallred
You should see how most of the rest of China lives

~~~
taway_1212
I think it's the combination of high-end tech with third-world everything else
that gives off that Blade Runner vide.

------
Ono-Sendai
Such an incredible waste of power and hardware, for a payment system that does
something like 3 transactions per second globally.

Off the top of my head idea:

What about a system that uses a bit of real-world, legal responsibility to
generate consensus. Something a bit like ICANN and the domain name system.

Take 10 or so trusted people or organistions worldwide, get them to each run a
node, each of which coordinate via the Raft protocol or whatever. A
distributed ledger is agreed on by each of those 10 nodes.

This should use far less power and be able to handle more transactions per sec
than bitcoin.

~~~
JohnJamesRambo
Or we could all switch to Ethereum, which will have Proof of Stake (low
electricity costs) instead of Proof of Work (insanely high electricity costs)
mining soon.

~~~
JustAnotherPat
POS networks already exist. No need to way 3+ years while the Ethereum team
reinvents the wheel.

~~~
xtracto
See PeerCoin ( [https://peercoin.net/](https://peercoin.net/) ) which has been
around for quite some time and has a POS/POW combination.

------
dvcc
I understand the need for a distributed ledger, but it still seems absurd to
me. All of this power is just getting put into a slow append-only database.

~~~
hanklazard
It's definitely a huge waste and a major impetus for moving to a Proof of
Stake, Useful Proof of Work, or other model for cryptocurrency security.

~~~
placeybordeaux
It's a bit of a tragedy of the commons, not sure who will be the third party
to impose a cost onto cryptocurrencies that consume excess energy. So far
bitcoin has maintained it's lead as the largest cryptocurrency essentially
entirely due to network effect. For most major complaints against bitcoin
there is an example of a crypto currency that doesn't have those 'failings'.

E.g.

Deflationary good: siacoin

Long tx times: Ethereum

Proof of work consumes needless energy: Peercoin

ASICs shift the power balance: Primecoin

Not anonymous enough: Monero

A singular append only blockchain is not enough: Byteball (it's simply a DAG
of transactions)

The problem is that there is no centralized player that is currently exerting
a cost, above mining costs, on the individuals to move them to a crypto
currency that doesn't have whatever negative property is being rallyed around
at the moment.

------
colordrops
If you read about this in a science fiction book 20 years ago you'd think the
author didn't know anything about computers or programming.

~~~
nsxwolf
I was thinking something along those lines but struggling to put it into
words. This sounds right.

------
tedd4u
Just, picking my jaw back up off the floor. The conditions there are
shockingly unsafe (pun intended) -- all that standing water on the floor? And
it's a firetrap -- all that trash lying around, no fire supression. In fact
the opposite -- those box fans that will very effectively oxygenate the
flames. Disaster there is almost certain.

~~~
Havoc
Funny. I thought it was actually pretty organised and neat considering this is
rural China and an operation aimed at doing things @ least cost.

------
jdhawk
In the quest for cheap power & better density, you'd think they would run
direct DC to everything, instead of a bunch of ATX power supplies

~~~
graycrow
Thick copper wires for DC probably cost more than energy converted to heat on
that power supplies.

~~~
ty_a
That's up for debate. Facebook and Google use DC in their datacenters to save
costs. Azure has a requirement for optional DC power from their vendors and
might be using it actively. I think AWS has looked into using DC power as well
but isn't using it afaik.

~~~
Obi_Juan_Kenobi
Do they use higher voltage DC and buck it down, or is it all 12V, 5V, etc. ?

------
aphextron
Good god this is so cyberpunk

~~~
euparkeria
Crazier than neuromancer

~~~
mrskeltal
Truth is stranger than fiction

------
lprubin
Does anybody know why the bitcoin mine has customers? If you can mine bitcoin,
why do you need to sell it to anybody other than on the open market? I could
see needing investment to build the infrastructure, but those would be
investors not customers.

Is there value in buying direct from the miner or selling direct to a customer
and not on an exchange? Maybe avoiding transaction fees?

~~~
bhaak
Exchange transaction fees might be one thing (cut out the middle man) but if
you buy directly from a miner it won't influence the price as it would if you
buy on a public exchange.

If you buy a big amount this is significant.

Such OTC (over the counter) transactions are also anonymous compared to
exchange buys.

~~~
lprubin
Can you say more about how buying at an exchange influeces the price and why
that's bad?

~~~
bhaak
The price we usually see for any traded asset is a weighted average of public
exchanges. It's a somewhat artificial number insofar as it only tells you that
somebody in the past was willing to pay that much for the asset. There's no
guarantee that you'll find a seller in the future for that price.

Consider if you wanted to buy a large amount of Bitcoins, like 10000. If you
look at exchanges, you will see that the sell and buy offers are public and
you can only buy as much Bitcoin right now as are offered on the orderbook.

If there are more than 10000 BTC for selling, you can just drop your money on
it. But those Bitcoins will be with different price tags. The cheapest offer
will sell 1000 for $2400, the next 1000 for $2450, etc. If you blindly buy,
your average buy price might be much more than the average price was!

Now that you cleared a portion of the orderbook, you have cause a price
imbalance. On this exchange A, the cheapest sell offer might be now $3000 but
on other exchanges B, it is still around $2400. Now bots and people will
scramble to take advantage of that price imbalance. You've create a volatility
wave that affects all public exchanges. And you never know how people will
react to that. Will the price keep increasing as people think "the price is
skyrocketing" or will people start selling massively because "oh, better cash
out before the price drops again".

So, you bought an asset which you payed more for than the market thought it
was worth before you bought it and you are uncertain what price it will settle
on afterwards.

Also, you might want to buy more in the future, so you don't want to let
people know that you are interested in acquiring it. If you buy publicly,
people will notice.

If you do an OTC, that is much more hidden and you don't create volatility,
especially if your OTC agents get them from miners directly and are not
accumulating them from exchanges in small amounts themselves.

~~~
lprubin
Thank you! Great reply.

------
peercoin
Why not move to proof of stake? Proof of Work mining used in bitcon to secure
the network as originally proposed in Nakomoto's paper has huge energy
requirements. The result is large energy hungry mines as shown by the article.
In addition, there is a centralization of governance by the miners.

One such example of a long running proof of stake is Peercoin. Peercoin is a
legit energy-efficient contender to Bitcoin. It's one of the first publicly
known implementations of proof of stake has been around for close to 5 years
now.

Peercoin is energy-efficient and runs on raspberry pis. It's been running
successfully for years now.

[https://peercoin.net/](https://peercoin.net/)

There are also academic proof of stake chains which virtually eliminate the
chance of forks, such as algorand.

[https://arxiv.org/abs/1607.01341](https://arxiv.org/abs/1607.01341)

~~~
runeks
> Why not move to proof of stake?

Because it doesn't make sense. If a chain, on which a token exists, needs
securing, you can't use that chain's token to secure itself.

> Mining has huge energy requirements as shown by the article.

Mining has no requirements at all. People just follow the best chain, and
miners can sell the bitcoins they earn by extending the best chain. It's
entirely voluntary.

~~~
peercoin
> Why not move to proof of stake?

>> Because it doesn't make sense. If a chain, on which a token exists, needs
securing, you can't use that chain's token to secure itself.

I mean I'm not entirely sure what this argument is based on? In addition to
existing proof of stake systems which have been running for years now, there
exist several papers with rigorous formal proofs. Including Turing Award
winner Silvio Micali's algorand.

Refute his paper. You will became very famous overnight.

[https://arxiv.org/abs/1607.01341](https://arxiv.org/abs/1607.01341)

> Mining has huge energy requirements as shown by the article.

>> Mining has no requirements at all. People just follow the best chain, and
miners can sell the bitcoins they earn by extending the best chain. It's
entirely voluntary.

I assume this is trolling or extreme nitpicking. Securing the network in proof
of work requires that the majority of computing power is held by honest
miners.

~~~
runeks
> I mean I'm not entirely sure what this argument is based on?

Proof-of-stake (PoS) doesn't solve the fundamental problem that we need to
reach consensus on one, single history of transactions. All PoS does is enable
us to say whether a new block is _valid_ , but that's not important. The
important part is that _everyone else in the network agree that this is the
new block_ (and not some other valid block). Valid blockchains are easy to
create, _the_ valid blockchain isn't.

Defining a valid block as a function of some preceding blocks is simple. The
challenge is to incentivize a decentralized network to come to complete
agreement on one, single version of all people's balances. Collusion is a huge
risk factor here (rewrite blockchain to assign the balance of the five most
wealthiest accounts to everyone else), and PoS does nothing to mitigate that.

In the worst case scenario -- where an exploit spreads through a security hole
in the reference implementation, and replaces the blockchain with its own
copy, silently assigning the balance of an old, rarely used account to the
attacker -- PoS falls on the floor, and proves unsuitable as a base for
digital money.

~~~
peercoin
>> In the worst case scenario -- where an exploit spreads through a security
hole in the reference implementation, and replaces the blockchain with its own
copy, silently assigning the balance of an old, rarely used account to the
attacker -- PoS falls on the floor, and proves unsuitable as a base for
digital money.

Replace exploit with malicious miner and it's not clear why proof of work is
better than proof of stake.

~~~
runeks
An honest mining majority is a hard requirement of Bitcoin. But proof-of-stake
doesn't solve the problem of collusion -- it's even more susceptible to it
since it's so easy to recreate valid-looking chains. With Bitcoin, two or more
competing chains will at least be visible (two distinct chains with a lot of
work), whereas they're everywhere in PoS and the main chain is qualitatively
no different from any other valid chain (of which we can create thousands
quickly).

~~~
peercoin
>An honest mining majority is a hard requirement of Bitcoin. But proof-of-
stake doesn't solve the problem of collusion -- it's even more susceptible to
it since it's so easy to recreate valid-looking chains. With Bitcoin, two or
more competing chains will at least be visible (two distinct chains with a lot
of work), whereas they're everywhere in PoS and the main chain is
qualitatively no different from any other valid chain (of which we can create
thousands quickly).

I'm not sure what math you are using to base this assumption on. A formal
argument by algorand is that the probability of a fork would be the age of the
universe. It is NOT straightforward or cheap to recreate valid looking chains
and generate the next block creating a fork.

[https://arxiv.org/pdf/1607.01341.pdf](https://arxiv.org/pdf/1607.01341.pdf)

~~~
runeks
A fork is not just created by the next block, but can be created by rewriting
any number of blocks (including from the very beginning, which must be valid
or it wouldn't be possible to begin a chain). Starting a new chain from
scratch -- with all valid blocks -- is easy with PoS, and it would look no
different from the right, valid chain. Again, the challenge is to come to
agreement on the correct history, not just any valid chain. The inherent
problem is that any valid chain of blocks can be produced quickly (just start
from scratch), and there's no way to know you have the right chain except
through majority vote, since there's nothing qualitatively separarating all
the valid chains.

PoS seems simple if we assume that everyone will gladly stay on the same old
chain, and only accept blocks that extend this, rather than attempt to get a
new chain accepted on which they have 10x as many coins. But why would they?
Why not switch to an entirely new chain, with the coins of the wealthiest 1%
assigned to the remaining addresses? Surely, the person who owned those coins
will protest, but no one will hear 1% in a network where majority vote is the
only solution to consensus (and the 1% would have no actual proof that the
chain, on which they own 1% of coins, is the right one).

~~~
peercoin
At this point this is just trolling.

The proof of stake you are describing is of your own invention and doesn't
address how systems like Peercoin or algorand actually function.

Starting from scratch with a new genesis block? Sure go ahead.

Rewriting any number of blocks is not straightforward due to the use of
digital signatures and the cryptographic guarantees that go along with
generating and choosing who gets to sign and generate the next block.

------
amai
Russia: [http://englishrussia.com/2017/06/26/russian-biggest-
bitcoin-...](http://englishrussia.com/2017/06/26/russian-biggest-bitcoin-
mining-farm/)

------
api
I've heard that some actually mine at a loss, since the real purpose is to get
money out of China and they can charge fees for that service that compensate.

------
dis-sys
For me, the really sad fact here is that they picked that place to run their
bitcoin mine because the electricity there is cheap, but what that poor place
can benefit from those mines after providing them with such more affordable
energy? I just saw pollution and greedy there.

~~~
oh_sigh
If that mine wasn't there, the energy would just be shipped off onto the grid,
never to be seen again.

That town does look depressing, but that's what like 90% of little western
Chinese towns look like.

~~~
dis-sys
if that mine wasn't there -

people, actually poor people, living next to those mines won't hear those
noise 24/7\. they don't need to witness the greedy saw in those photos/videos.
the depressing town is still going to be depressing, but at least with less
electronics junks.

the issue is pretty simple here - what is the benefit for this little
depressing town or the society? nothing. it is just a cancer.

~~~
oh_sigh
The hydro plant, which predates the bitcoin mining operation, creates far more
noise than some electronics churning out hashes.

Why don't you let the residents decide what they want? Maybe they want access
to the internet and cell phones, which the mining operation helped provide.

~~~
dis-sys
what a joke. the "hydro plant" generates electricity, noisy or not, at least
there is some benefit.

Internet and cell phone network is available in like 99% of Chinese towns. Do
you have any evidence showing it was the mining of bitcoin that brought those
thing to such small towns? If you don't, how about stop using your imagination
as proof?

------
tragomaskhalos
Is it safe to assume that this isn't quite what Satoshi had in mind back in
2009 ?

~~~
monort
It seems that no, he expected exactly this:

 _At first, most users would run network nodes, but as the network grows
beyond a certain point, it would be left more and more to specialists with
server farms of specialized hardware._

[https://webonanza.com/2015/10/02/did-satoshi-predict-
pooled-...](https://webonanza.com/2015/10/02/did-satoshi-predict-pooled-
mining-big-farms-and-asics/)

~~~
culturalzero
So... We're centralizing the production of the currency that's supposed to
decentralize everything?

~~~
Obi_Juan_Kenobi
There's a meaningful difference between centralized, decentralized, and
distributed. I think you may be confusing the latter two.

Decentralized systems can still form groups and have various hubs. In such a
case, the security of the network depends on how large these hubs get, not
whether they exist at all.

Distributed systems ensure that most nodes are similarly sized and have
similar connectivity to the network. In the case of cryptocurrency, many
people imagine this as every user of the currency having a roughly equal stake
in maintaining and securing the network.

Distributed systems may be ideal for some applications, but they are (likely
and thus-far) not required for Bitcoin.

First, the degree of centralization is still relatively low. Individual miners
remain small fractions of the network. Some mining pools have gotten quite
large in the past, but miners can join and leave pools as they see fit. The
risk they present is fairly limited as their network power is not controlled
by a single entity.

There's also the issue of geographical centralization. This may be largely the
result of ASIC development. Right now, mining profitability relies on rapidly
adopting new, more efficient miners as quickly as possible. It strongly favors
cheap power and short timelines. As the ASIC market matures and runs into the
same hard limits that CPU manufacturing is faced with, the economics change
such that more capital investment can make sense. In these cases, mining may
be profitable in more geographically diverse areas.

------
MarkMc
Iceland has very cheap geothermal electricity and a very cold climate to cool
the servers. How does China compete with Iceland?

~~~
Obi_Juan_Kenobi
I think the rapid development of ASICs is a large part of the issue. The
capital lifecycle of Bitcoin mining is currently on the order of months to
perhaps a couple years. That, combined with the volatility of Bitcoin price,
makes the Chinese approach ideal.

As the ASIC market matures, and perhaps as the price becomes more stable, I
think we'll see mining begin to occur in more areas as planning for 2+ years
begins to make sense. Iceland would be one attractive area, as would some
desert areas with low costs and solar energy.

Certainly difficult to predict, though.

------
m-j-fox
Wow. So damp. Someone's going to get electrocuted. Where's Chinese OSHA?

~~~
sizzzzlerz
Its not just the appalling dangers of water and electricity in close proximity
but water on the floor indicates high humidity along with the heat causing
premature failures in all the equipment. I guess those costs aren't a factor,
however, when you're paying your workers pennies a day.

~~~
oh_sigh
I'm 100% sure their workers aren't getting paid pennies per day. Why say
something that's just patently untrue?

------
thomasdd
What about "Bitcoin-Mining-Water-Power Plant" :) Would be cool!

------
nodesocket
Thanks China for wasting resources and being extremely pollutive mining coins
for tiny profits. Anybody who complains about the Paris Agreement needs to be
informed and look at the real climate offender China.

~~~
brighton36
It's not china's government, it's the Governments of the world that put a
premium on anonymous value. Most of the demand for that comes from the US. If
you feel strongly about it, petition the USG to allow alphabay to take credit
cards.

~~~
nodesocket
So China cannot be held responsible because their citizens are poor and
economically disadvantaged? Must be the US's fault. Big bad USA. Typical.

------
coin
That page has some sort of funky scrolljacking, -1 for usability. Yet another
reason to disable JavaScript.

------
GrumpyNl
These images are even more proof that a bitcoin is worthless and the market is
manipulated.

------
tmsldd
The life of a bitcoin miner worker doesn't look that much different from the
coal miners ones.. at least in this case in particular..

------
mastazi
OT/Rant: In my browser, all pictures except the hero image are extremely
blurred to the point that I can't even tell what's in the image. It could be
because Privacy Badger is blocking some script or stuff like that but honestly
I don't have the energy to find out why right now (it's 00:45 here in NSW), I
believe users should be able to see a picture without going through executing
some JS, accessibility is important. This is almost as annoying as those
scripts that mess with your scrolling. It is also completely unnecessary since
every modern mainstream browser since probably 5 years ago implements some
form of lazy loading.

~~~
sp332
It does look like they're copying Medium's fade-in code, but these fallbacks
should let the page degrade gracefully. Two examples:

    
    
      <noscript>
        <img itemprop="image" src="https://qzprod.files.wordpress.com/2017/07/china_bitcoin_002-e1499795756538.jpg?quality=80&#038;strip=all&#038;w=320" alt="Inside the World of Chinese Bitcoin &#039;Mining&#039;" title="">
      </noscript>
    
      <img data-srcset="https://qzprod.files.wordpress.com/2017/07/china_bitcoin_010.jpg?quality=80&amp;strip=all&amp;w=320 320w,
      https://qzprod.files.wordpress.com/2017/07/china_bitcoin_010.jpg?quality=80&amp;strip=all&amp;w=640 640w,
      https://qzprod.files.wordpress.com/2017/07/china_bitcoin_010.jpg?quality=80&amp;strip=all&amp;w=940 940w,
      https://qzprod.files.wordpress.com/2017/07/china_bitcoin_010.jpg?quality=80&amp;strip=all&amp;w=1600 1600w,
      https://qzprod.files.wordpress.com/2017/07/china_bitcoin_010.jpg?quality=80&amp;strip=all&amp;w=3200 3200w"
      data-src="https://qzprod.files.wordpress.com/2017/07/china_bitcoin_010.jpg?quality=80&amp;strip=all&amp;w=1600"
      sizes="(max-width: 320px) 320px, (max-width: 1024px) 640px, 940px"
      class="progressive-image-large"
      alt="Inside the World of Chinese Bitcoin 'Mining'">

~~~
mastazi
AFAIK that degrades gracefully only if you have JS disabled but there are many
other reasons why the progressive loading script may not work as expected.

