
Inside a Chinese Bitcoin Mine - danoprey
http://www.thecoinsman.com/2014/08/bitcoin/inside-chinese-bitcoin-mine/
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beamatronic
Is there any estimate of how much income this particular mine can produce,
compared the the capital outlay and the ongoing costs?

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mrb
This operation currently mines about $262k per month:

230e9 (each machine does 230 Ghash/s) * 2500 (# of machines) * 3600
(second/hour) * 730 (hour/month) / (2^32 (average number of hashes to solve a
block at diff=1) * 19.8e9 (current Bitcoin difficulty)) * 25 (BTC/block) * 590
(USD/BTC) = $262000/month

The article says their electricity bill is $60k per month. Subtract the 3
employees salaries, say $5k per month (this is China). So you are looking at a
pure profit of $197k per month. Of course these profits are declining quickly
over time; look how fast the difficulty has been rising:
[http://bitcoin.sipa.be/speed.png](http://bitcoin.sipa.be/speed.png)
(logarithmic scale!)

And this mine only represents 0.3% of the total network speed (about
170,000,000 Ghash/s).

Edit: bellerocky: most exchange fees are < 1% to turn BTC to fiat.

Edit: FigBug: roughly yes, but because the network is growing, there are more
than 3600 coins mined per day (blocks are solved a bit more often than every
10min).

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yutah
that doesn't include the cost of hardware but I guess it is negligible... and
I thought mining was not profitable at current prices.

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wmf
Mining tends to not be profitable if you pay retail prices for ASICs, but if
you make your own ASICs it's still pretty profitable.

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misterbwong
Quite interesting. What's to stop the bitcoin pool from consolidating into a
few key players as difficulty to mine progresses? There's no way that the
miners are spending >250k/mo and pushing bitcoins back into the system.
Wouldn't this hypothetically consolidate wealth in the hands of those with
enough capital to create monstrous factories like this?

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pmalynin
I wonder about the effects of such establishments on the Bitcoin ecosystem as
a whole. In theory, they're supposed to strengthen the network by providing
more hashing power. But what worries me is the onset of mega-pools composed of
such factories that will gain >51% of the network's computational power
effectively gaining a monopoly on Bitcoin.

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bdcravens
That's the one thing that keeps eating at me. Would it not be trivial for a
large corporation or government entity to throw enough money around to
accomplish this? The only response I hear is that the market will magically
prevent this.

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patio11
Subverting the entire Bitcoin network is almost certainly not as much as a 1
ACE problem. (Aircraft Carrier Equivalent)

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jafaku
Except the network can adapt by modifying the code, so calculating the cost of
destroying Bitcoin is not trivial. The security of the network is not static,
because it's also made of people with economic incentives, the same way any
other system is also made of people, eg: When a website is under a DOS attack,
their administrators will do various things to mitigate or completely stop the
attack.

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angersock
The cables snaking everywhere and the old hardware piles give me flashbacks to
_Serial Experiments Lain_.

All they're missing is some chrome and neon, and we're living the cyberpunk
dream.

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VBprogrammer
I wonder how much effort they've put into optimisation? Small gains (1-2%
rather than order of magnitudes) for these guys obviously mean a lot more than
for any bedroom operation.

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b1db77d2
They're ASIC processors. It's already set in stone (silicon, whatever).

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VBprogrammer
That occurred to me while writing the comment, but I assume there are other
factors which could be worth monitoring and improving, for example network
topologies or even cooling methods.

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readerrrr
What is their internet connection, fiber? Surely they must have a special
contract or multiple providers.

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brixon
I don't think Bitcoin is a big bandwidth user. A lot of little/small
connections.

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vbuterin
They also only need one connection; they can simply split the data across all
the workers. They will need to send shares from all the workers if they're not
solo mining, but even those are less than 100 bytes each, and if that becomes
too much of a nuisance they can just solo mine.

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hodgesmr
Google Cache:
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mandelbulb
Google doesn't cache images but archive.today does:
[https://archive.today/8EX79](https://archive.today/8EX79)

