A short photo-heavy story by ‘Bitsmith’ explores the engine-room behind digital cryptocurrency, where Chinese ‘miners’ run banks of computers to fetch new monetary units out of mathematical abstraction. The incentives for the mining operation are straightforward, and economically indistinguishable from those driving mineral mining operations. Due to the genius of the Bitcoin design, this massive computational effort serves, automatically, to secure the integrity of the system against subversion. What offers opportunities for extractive wild-catting from the entrepreneurial side, is a decentralized trust mechanism from that of the currency exchange network.
Located in a re-purposed industrial space, the mining operation’s 2,500 machines perform a total 600 trillion operations per second, consuming RMB 400,000 of electricity per month. There’s an attached audio file with the story, so you can listen in on the process. It’s not pretty, but it sounds unmistakably serious.
The tone of Bitsmith’s prose has been peeled straight off the cryptocurrency frontier, which makes it doubly informative. This is the object and the spirit of capitalist perception in the early 21st century:
Getting the opportunity to visit this mining operation was very eye-opening for me. Walking around the warehouse floor, I was struck with a feeling of awe that THIS is what keeps bitcoin alive. That even if someone wanted to bring down bitcoin, they’d have to outdo these guys and the dozens of other operations like this around the world. The decentralized nature of it all … that this is just one operation among many, run by different operators in different countries around the world. This really drove home that bitcoin can’t be killed by decree. Make it illegal in one country and people like this will keep hashing away in others.
This is a far cry from the small-time home miners of the not-too-distant past. Not even two years ago I knew a guy mining tons of coins per day with just a couple dozen GPU units in his bedroom.
The other feeling I got while there is that this is kind of a libertarian fantasy for many. These guys are performing a valuable service and getting paid well for it. Too many in the world get paid well at the expense of others, or dedicate their lives to giving back to society without a penny in return, but mining farms like these are participating in the economy in a purely capitalist way (and the good kind of capitalism, not “socialism-for-banks-but-we’ll-call-it-capitalism-anyways”).
Love it or loathe it, the future that has already begun to arrive. This is an inspection tour not to be missed.