The small city of Dalat was once famous in the industry for the gathering of large Bitcoin mining farms. In the past few years, gold diggers for virtual currencies have flocked here. In the 24-hour uninterrupted machine noise, the “miners” once had a cyberpunk-style dream of making a fortune. And now, the local color is quickly fading.
100 kilometers north of Ordos in Inner Mongolia, there is a small city called Dalat. The name is trivial in the geographical sense, but in the Bitcoin world, it is truly a terrific place.
Dalat was once famous in the industry for the gathering of large Bitcoin mining farms. In the past few years, gold diggers for virtual currencies have flocked here. They built huge factories and densely packed rows of professional mining machines. In the 24-hour uninterrupted machine noise, the “miners” once had a cyberpunk-style dream of making a fortune.
And now, the local color is quickly fading.
According to the official timetable, Inner Mongolia will clean up and shut down the virtual currency mining industry at the end of April this year. After the peak period of the industry, in the past two years, Bitcoin miners have become less and less living space because they are considered “unrelated to the real economy” and “avoided supervision and consumes a lot of energy”.
“As far as I know, most of the mines in Inner Mongolia have moved.” said Lin Le, who works as an operation and maintenance worker at a large Bitcoin mine in Xinjiang. Some of his friends in Wuhai City (located in western Inner Mongolia) have recently moved mining machines to Sichuan, Gansu, Xinjiang and other places—whether they want to or not, they have to choose to leave.
“Mining” is a popular name in the Bitcoin world, to the effect of solving the problems raised by the system with the computing power of a professional computer (mining machine). In the round of contests about every ten minutes, whoever can calculate the result first will get a certain amount of Bitcoin as a reward.
In the original idea of Bitcoin founder Satoshi Nakamoto, everyone can participate in “mining”, and he does not want this process to be monopolized by professional institutions or equipment. But in fact, the founder’s plan was in vain. In order to increase the success rate of winning prizes, Bitcoin “mining” has long evolved into an arms race in computing power. The higher the percentage of computing power in the entire network, the more likely it is to win in the exciting competition. Naturally, mining farms with large-scale mining machine computing power have emerged.
Inner Mongolia was once a very ideal mining site. In the early days, with the help of cheap power supply, geographical conditions conducive to plant construction and heat dissipation, and local open policies, it became the so-called largest Bitcoin mining farm in the world. According to media reports, during the peak period, the mines in Ordos can dig out more than 100,000 bitcoins a year.
“In the past few years, the local power plants in Inner Mongolia were not connected to the national grid. The electricity generated can only be digested and used in the region. There is surplus electricity but no major electricity users can be found. The local price is more than two cents per kilowatt-hour. , For the operators of some Bitcoin mining farms.” A senior mining industry person who bought mining machines around 2013 told a “businessman”.
Therefore, in the vast hinterland of Inner Mongolia, mines with tens of thousands, hundreds of thousands or even millions of mining machines have been built one after another. According to this person in the mining circle, the machines in the mine were all stacked at the time, and they were mainly operated by thermal power. A normal-scale mine consumed more than 100,000 kWh of electricity every day. In their eyes, “a day’s electricity in a mine is enough for ordinary people to use for several lifetimes.”
The prosperity and prosperity of the mining farm also attracts young people who are ignorant of Bitcoin to come here and become insignificant miners in the world of computing power. They guarded by the rumbling mining machine, guarded at Dalat, guarded at Wuhai, and guarded at Xilin Gol, expecting to be changed by the ethereal Bitcoin.
The longing days are actually quite painful.
“One supervisor plus three to five operations and maintenance requires tens of thousands of machines to be managed. If it’s a few thousand machines, it is usually maintained by two people.” When it comes to the work of bitcoin miners, the mining machines familiar with the local conditions are “Second Road Traffickers”. “Li Feng said.
The work of operation and maintenance is not complicated, and the main thing is to keep the mining machine continuing to mine online. Since most of the mines are far away from the bustling cities, “some don’t even have a bathing place”, in Li Feng’s words-there are no leisure activities in the mountains, and I stay in the dormitory after work during the day and play mobile phones. If the machine breaks a lot in the middle of the night, you have to be urged by the boss to repair it as soon as possible.
In the geographic map of virtual currency mining, Inner Mongolia is not the only favored area. Taking into account the advantages of hydropower prices compared to thermal power, every May and June when the southern flood season arrives, provinces with developed hydropower stations such as Yunnan, Guizhou and Sichuan become places for mines to move to. When the dry season came, these mines moved back to areas such as Inner Mongolia and Xinjiang.
The miners have become migratory birds. They are like modern gypsies in the Bitcoin world, who have to migrate seasonally with the army of mining machines.
“Before doing this, I thought that cryptocurrency and big data are very high-end, but the technical content of operation and maintenance is not high.” Lin Le roughly described the current mining operation mechanism-the mining opportunity in the mine is connected to a certain Large mining pool, the mining pool concentrates more users and computing power, if you successfully get bitcoin rewards, it will be distributed according to the percentage of computing power provided by you.
However, as the computing power of the whole network increases, the difficulty of mining is getting higher and higher. He feels a little pessimistic about the prospects, “I just want to make money, but I think this industry is still a few years away at most.”
Before the clearing up of the storm, the entire mining industry, including Inner Mongolia, once fluctuated with the Bitcoin market.
“Business figures” learned from industry insiders that during the market downturn before August last year, even the popular Antminer S9 (developed by the mining machine giant Bitmain) was not very popular, and each unit cost 1,600 yuan- The price of 1800 yuan (including power supply) is rejected. However, with the rapid rise in currency prices since then, popular mining machines and hardware devices in the industry have become hard to find.
According to the official website of Bitmain, its latest Antminer S19 is currently sold out, the official price is 36,500 units, and the delivery time is scheduled for October this year. In fact, the market price of this model of Antminer has risen to 50,000 to 60,000 yuan per unit. Although the branch company established in Dalat has been cancelled, the mining machine giant, which has avoided Inner Mongolia, is still taking advantage of the opportunity to make gold.
Indeed, when the price of Bitcoin exceeded $60,000, practitioners once again ushered in a big bull market. “Now that the mining machines and graphics cards are lacking, the mine owners are very excited.” The machinery and equipment that were forced to evacuate from Inner Mongolia have also become cash cows in the eyes of the entire industry. Li Feng tried to acquire Inner Mongolia’s mining machines on the Internet, but he also knew, “It’s already been done for a long time. Who doesn’t want to grab a hand of resources and make money quickly.”
For the miners who still live in various parts of Inner Mongolia, this is the last feast they have experienced in the local area.
As the countdown enters the last month and a half, the mood of the mine owners can be described as complicated.
“How can I put it, these bosses are definitely not willing to move.” Lin Le felt from his colleagues in Inner Mongolia, “On the one hand, it is troublesome to unload and transport the machines. On the other hand, the mining machine takes more than ten days. No coins can be mined. What’s more, new venues are not easy to find.”
According to Li Feng’s estimation, if there is a power outage, a normal-scale mine will lose at least tens of millions a day, small mines will also lose millions, and those large mines will lose hundreds of millions.
Perhaps not intending to toss it anymore, a mine owner in Inner Mongolia that Lin Le came into contact with simply sold 1,700 machines in his hands. According to his guess, the boss either couldn’t find a new venue, or someone else was paying the right price, so he simply sold him away.
Although the currency price is still rising, the mining environment in Inner Mongolia is no longer what it used to be. According to the analysis of the above-mentioned mining circles, coal prices have continued to rise in recent years, power generation costs have increased, and signs of power shortage have gradually emerged. The mining industry, which is defined as “pseudo-financial innovation”, will naturally be shut down under the new situation.
For the hustle and bustle of the mining industry in Inner Mongolia, after many large mining farms took off early, the “residual forces” would be wiped out immediately. The direct loss is obvious: the mine is moved away, and the local power station that originally relied on the mine to obtain considerable income is “to be beaten back to its original form.” And Ordos, which has experienced the coal frenzy and the Bitcoin mining feast, seems to have difficulty. To avoid silence again.
As for those miners who have sought wealth dreams in the desolate land, there may not be many choices. In Li Feng’s view, “It’s impossible for a miner to change careers. I understand that those people, besides doing this job, can also be a sazi?”
I have to say that this is a cruel ending.
Author/ Translator: Jamie Kim
Bio: Jamie Kim is a technology journalist. Raised in Hong Kong and always vocal at heart. She aims to share her expertise with the readers at blockreview.net. Kim is a Bitcoin maximalist who believes with unwavering conviction that Bitcoin is the only cryptocurrency – in fact, currency – worth caring about.