BBC reporter Danny Vincent visited a bitcoin mine in China that reportedly mines up to $8 million per year. Vincent was invited to tour the mine under the condition that its location remains confidential.
The reason for the secrecy is that the mine is outside the control of the Chinese government, which has not taken a pro or con position on the cryptocurrency.
The location is so high in the mountains that a visitor has to bring oxygen cans to breathe. Mobile phone connections are inconsistent. Wi-Fi-enabled chat apps and video calls are the main modes of communication.
Owner A Former Farmer
A 30-year-old by the name of Chandler Guo served as Vincent’s guide. Guo’s family ran a beef farm. After investing in bitcoin, Guo has turned what was once a sleepy town into a “hidden bitcoin economy.” Guo operates a company called Bitbank.
The Bitbank website, https://bitbank.com, describes the company as a financial technology firm that encompasses every aspect of the bitcoin ecosystem, including the design and manufacture of hardware and software.
Guo’s LinkedIn page says he is an angel investor in cryptocurrency startups including Btc123.com, Bitbank.com, Jua.com, Bw.com, Bitfund.pe yangyang.tv, YHMiningFarm Richfund.pe, bither.net, okcoin.com and huobi.com.
Video Gives An Inside Look
Vincent’s report includes a video which gives a history of bitcoin and explains its features. The video shows the inside of the mine.
The mine houses hundreds of computers. The workers, mostly male and formerly farmers and recent graduates, reside onsite. Workers live six to a room. There are posters of Chinese boy bands on walls over the bunk beds.
One worker, Fang Yong, has worked as a miner for about a year. A 21-year-old graduate, he rides a moped and dresses like an urbanite, despite having a rural background. He believes in bitcoin’s potential.
Bitcoin’s price was $400 USD when the video was made.
In the future, Guo said China will make technology products, as opposed to the simple products like shoes and clothes that the country made previously.
Chinese Mining Expands
Guo said the mine, operating 24 hours a day, mines 50 bitcoins all day.
Guo launched the operation two years ago. At that time, mining in China represented about 40% of the world’s mining equipment. China now has 70% of all the equipment, he said.
Guo has established two mines in China and is building another one that, once complete, will be the largest in the world and will produce more than 30% of the entire world’s bitcoin.
Guo is also developing an app that will enable a tablet or a smartphone to mine the cryptocurrency.
Bitcoin Has Competition
Bitcoin has competition in China. Many Chinese use the WeChat and Alipay wallets. The government has also signaled an interest in creating an official digital currency.
Some observers, such as bitcoin enthusiast Mike Hearn, say organized cryptocurrency mining could undermine bitcoin. Hearn said the slower Internet connections in China are hindering the currency’s flow and would ultimately destroy bitcoin.
Guo disagrees. He sees bitcoin as the future of commerce.
Images from BBC.