Last October, Motherboard gained access to a massive and secretive makeshift bitcoin mine housed in a repurposed factory in the Liaoning Province of rural northeast China.
This is the infrastructure that keeps the digital currency’s decentralized network up and running, and its operators are profiting big time.
The facility we visited is but one of six sites owned by a secretive group of four people, part of a colossal mining operation that, as of our visit, cumulatively generated 4,050 bitcoins a month, equivalent to a monthly gross of $1.5 million.
In other words, if you’ve bought or sold or conducted any bitcoin transaction recently, these are some of the folks you have to thank.
XIA YU, A TECHNICIAN AT THE MINE, INSPECTS THE SECLUDED FACILITY’S THOUSANDS OF CUSTOM ASIC MINERS DURING HIS SHIFT. IMAGE: MOTHERBOARD
Despite their dystopian appearance, the six mining farms encompass eight petahashes per second of computing power, whose brute force as of October 2014 accounted for 3 percent of the entire bitcoin network.
Strangely, workers at the secluded mine actually live inside the facility itself, returning home just four or five days a month, according to our local guide and translator, an acquaintance of the operation’s owners, who granted us access to the mine.
During the summer months, temperatures inside are in excess of 100 degrees, and a persistent, deafening buzz is always present due to the dozens of industrial fans required to maintain a steady temperature for the site’s 3,000 ASIC miners—custom-built computers specifically built for mining bitcoins.
Our access to the mine was granted under the strict condition that we wouldn’t reveal the details of the operation’s ASIC miners nor who supplies them.
It should be noted too that a couple months is basically a lifetime in the cryptocurrency world, and, accordingly, bitcoin’s price, difficulty, and hashrate has unsurprisingly fluctuated wildly in the months following our visit. (The price of a single bitcoin was hovering around $375 when we were there.)
For the bitcoin world, 2014 was a bit of a wild year: one that saw a pronounced uptick in bitcoin’s mainstream acceptance from the likes of Microsoft, Dish, and Dell. There was even a BitPay-sponsored “Bitcoin Bowl” during the college football postseason.
And just last month, news broke that the first licensed US bitcoin exchange was set to open, a huge milestone for the six-year-old cryptocurrency.
But despite its image in the press and purported unmasking of its creator, the real face of bitcoin belongs to the people operating the mines.