Photo Essay Shows Hydro-Powered Bitcoin ‘Mines’ in China
Despite steep losses this month that blunted a yearlong bull market, the decentralized cryptocurrency Bitcoin remains in wide and growing use across the globe as a store of value, means of wealth transfer, and speculative asset. Bitcoin’s blockchain-based network currently processes hundreds of thousands of transactions daily, involving the transfer of more than $2 billion worth of monetary value per day.
However, the widespread use of Bitcoin is not without costs; the cryptocurrency’s network relies on computationally-intensive “mining” operations conducted on a vast decentralized network of computers running specialized equipment in order to verify transactions and create new Bitcoin. As Bitcoin’s use and value rise, mining costs and environmental impact have risen to astronomical levels. At time of press, the Bitcoin network currently uses a staggering estimate of 44 TWh of energy per year–about the equivalent of Hong Kong’s entire energy usage–with just a single verified Bitcoin transaction sucking enough electricity to power more than a dozen American homes for a day.
With Bitcoin mining no longer profitable for average consumers given steep energy costs and the price of the specialized GPU and ASIC chips used in cryptocurrency mining, the network’s mining nodes have become increasingly concentrated in regions with shady law enforcement and/or access to discounted energy. One such area is Sichuan province in China, where monied cabals of questionable legal standing operate huge warehouses of mining computers near the region’s abundant hydroelectric resources. Al Jazeera recently provided a glimpse into this crypto underworld, publishing an excellent photo essay detailing the dark, fan-cooled warehouses of Sichuan and other aspects of China’s mining industry that keep Bitcoin running.