Editor’s Note: The Bitcoin industry exists in a legal gray zone in China, and the miners in this story, concerned about attention from the government, asked not to have their full names or the names of the villages where their mines are located mentioned in this story. Sichuan Province is home to one of China’s largest bitcoin mines, where mining machines are used to produce cryptocurrency that is sought by entrepreneurial Chinese investors.
As of this article, Bitcoin is trading around $2,300 after falling below $2,000 over the weekend, which is worth
more than the standard unit of gold, which is an ounce.
On the whole, the cryptocurrency market reached $84.9 billion on Tuesday, a 40% increase from a $61 billion low this weekend,
Chinese photographer Liu Xingzhe visited Sichuan’s Ngawa (Aba) Tibetan and Qiang Autonomous Prefecture, about 175 miles outside of Chengdu, to familiarize himself with how Bitcoin mining machinery works and the miners who live in dormitories taking care of business for days on end.
A Bitcoin “mine” with a blue tin roof sits next to a hydroelectric power plant in Ngawa (Aba) Tibetan and Qiang Autonomous Prefecture, Sichuan Province, 27 September 2016. Located at the eastern edge of the Tibetan Plateau, the area has abundant hydropower, a key factor in making energy intensive mines cost effective. Electricity typically accounts for 60-70% of a bitcoin mine’s expenses.
ChinaFile, one worker, who lives in one of the dorms with his colleagues, said that the nearest town is about 20 miles away, paying to hitchhike there once a week. Employees use their phones at the Bitcoin mine, 26 September 2016. The mine has 550 “mining machines” running continuously. They solve complicated mathematical problems for which they are rewarded with Bitcoins. Seven employees work in shifts monitoring the machines to keep the mine running 24 hours a day. “The good thing is, there isn’t anywhere to spend money, so you can save your whole salary,” the miner said.
Bitcoin mine owner Liu (pictured below, left), 29, moved to Sichuan Province from Henan Province back in 2015 for cheaper and more abundant hydroelectricity.
He now manages more than 7,000 mining rigs for clients who pay for Bitcoin across China, who are able to remotely monitor the machines and earnings via smartphone apps.
Bitcoin mining has also become increasingly popular in remote areas of Sichuan Province due to cheap labor and computing power (paywall), according to
Quartz. Huang, 25, Kun’s brother, inspects a malfunctioning mining machine during his night shift, September 26, 2016. Miners can check a machine’s condition and operations using phones and personal computers. For most issues, they can simply restart a machine. “If it’s a complicated problem, we just ship it to the factory and let them fix it,” Huang said. An employee at the hydroelectric power plant checks electric generators, 26 September 2016. Kun convinced the owner of the hydroelectric power plant to build a Bitcoin mine next to the power plant in 2015. Bitcoin miners attended the first China Bitcoin Miner Conference, at Chengdu Tianfu Financial Center, in Sichuan Province, 22 October 2016. Packing boxes for mining machines pile up in an employee dormitory, 26 September 2016. Kun recently（May 2017） purchased new mining machines: the AntMiner S7 ($490) which has greater computing power than the AntMiner S5 ($140) it would replace. 550 mining machines, a combination of S7 and S5 models, running 24 hours can mine 2.5 Bitcoins a day, according to Kun — worth around $6,400. Tibetan women wait for a party hosted by Kun to celebrate the mining machines’ upgrade, September 26, 2016. Liu, 29, stands in front of a wall of cooling fans at his Bitcoin mine where he houses and operates mining machines for miners who don’t want to move to rural Sichuan, in Ngawa Tibetan and Qiang Autonomous Prefecture, Sichuan Province, 27 September 2016. Internet cables and power cables at Liu’s mine, 27 September 2016. Sun, in his early twenties, is an employee of a Bitcoin mine in Ngawa Tibetan and Qiang Autonomous Prefecture, Sichuan Province, 28 September 2016. Packing materials for mining machines pile up beside the water-cooling system at Sun’s mine, 28 September 2016. Sun’s colleagues rest in their dorm, 28 September 2016. They live at the mine, which is so remote the nearest public transportation is 20 miles away, in the nearest town. They pay to hitchhike there once a week. “The good thing is, there isn’t anywhere to spend money, so you can save your whole salary,” Sun says. Employees use their phones near the mine Sun works for, September 28, 2016. Goats from a nearby village walk among cooling fans at the mine, 28 September 2016. Stacks of AntMiner S9 mining machines ready to be shipped to clients around the world, at Bitmain Technologies’ manufacturing base in Shenzhen, 09 November 2016. Bitmain and Canaan, another Chinese company, dominate the global mining hardware market. Employees work on an assembly line of AntMiner S9 mining machine at Bitmain’s manufacturing base, Shenzhen, 09 November 2016. A researcher works in a lab at Bitmain’s manufacturing base, Shenzhen, 09 November 2016. An employee puts labels on AntMiner S9 mining machines, in Shenzhen, 09 November 2016. The AntMiner S9 is the most efficient mining machine on the consumer market right now and is produced by a Chinese company called Bitmain. It’s current cost is $1,113. Due to the high price of bitcoin, its has been out of stock for a long time. The price in the black market is almost doubled. Bitcoin miners add each other on social media (Wechat) after attending the first China Bitcoin Miner Conference, at Chengdu Tianfu Financial Center, in Sichuan Province, 22 October 2016. They use Wechat to exchange information of encryption currency. Employees work at BTCChina (BTCC)’s office, in Shanghai’s financial district, 13 January 2017. BTCC was founded in 2011, and is now one of China’s largest Bitcoin exchange platforms. According to its CEO, Bobby Lee, Chinese people like the “online gambling” feel of Bitcoin’s instability; also, with the Chinese government’s restrictions on many investment channels, people welcome new ways to invest their money. Employees use their phones to play games and watch TV drama near the mine Sun works for, 28 September 2016. Employee resembles calculation board at Liu’s mine, 27 September 2016. A 29-year-old Tibetan named Kun walks in between aisles of mining machines, 26 September 2016. Kun is the mine’s manager as well as one of its investors. He learned about Bitcoin through a friend and started investing in 2015. A mountain road winds toward Bitcoin mines, in Ngawa Tibetan and Qiang Autonomous Prefecture, Sichuan Province, 26 September 2016. Sichuan is also called “the capital of bitcoin mining”. Images courtesy of Liu Xingzhe via ChinaFile