The Rise of Bitcoin Mining in Sichuan’s Hydropower Hubs
Located in Sichuan’s Ngawa Tibetan and Qiang Autonomous Prefecture, a Bitcoin mine with a blue tin roof operates adjacent to a hydroelectric power plant. This strategic placement leverages the region’s abundant hydropower, which reduces energy costs—critical for Bitcoin mining, where electricity typically constitutes 60–70% of operational expenses.
How Bitcoin Mining Works
- Mining Machines: The facility houses 550 machines (a mix of AntMiner S5 and S7 models) running 24/7 to solve complex mathematical problems, earning 2.5 Bitcoins daily (worth ~$6,400 in 2016).
- Labor: Seven employees monitor operations in shifts, troubleshooting issues via phone or PC. Major malfunctions require factory repairs.
Behind the Scenes: The People Powering the Mines
Kun: The Tibetan Entrepreneur
A 29-year-old manager and investor, Kun learned about Bitcoin in 2015 and collaborated with a hydroelectric plant owner to build the mine. His upgrade to AntMiner S7 machines ($490 each) boosted efficiency over the older S5 models ($140).
Huang and the Night Shift
Kun’s 25-year-old brother, Huang, handles night inspections. "Most issues just need a restart," he says, highlighting the mine’s remote troubleshooting.
Life in Isolation
Employees live on-site, hitchhiking 20 miles weekly to the nearest town. "No spending means saving your whole salary," notes Sun, a mine worker. Goats from nearby villages wander among cooling fans, underscoring the rural setting.
Scaling Up: Industrial Mining Operations
Liu’s Client-Centric Model
Liu, a migrant from Henan, manages 7,000+ machines for remote clients. His Sichuan-based facility offers cheaper electricity, while clients monitor earnings via mobile apps.
Bitmain’s Global Dominance
At Bitmain’s Shenzhen factory (November 2016):
- AntMiner S9 ($1,113 per unit) dominated consumer markets.
- Assembly Lines: Workers mass-produced hardware, with Bitmain and Canaan leading global mining hardware sales.
Bitcoin’s Cultural and Economic Impact in China
BTCC and Market Trends
Founded in 2011, BTCChina (BTCC) became a top exchange. CEO Bobby Lee noted Chinese investors embraced Bitcoin’s volatility as "online gambling," especially amid limited government-approved investment options.
Community and Conferences
At the 2016 China Bitcoin Miner Conference in Chengdu, miners networked via social media, reflecting the industry’s collaborative spirit.
FAQs
1. Why is Sichuan ideal for Bitcoin mining?
Sichuan’s hydropower surplus cuts electricity costs, which are 60–70% of mining expenses.
2. How much Bitcoin can a small mine produce?
550 machines (AntMiner S5/S7) yield ~2.5 Bitcoins daily (2016 values).
3. What’s the role of mining machine manufacturers?
Companies like Bitmain design energy-efficient hardware (e.g., AntMiner S9) to maximize profitability.
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4. How do remote mines handle maintenance?
Most issues are resolved via phone-controlled reboots; complex repairs require factory returns.
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Conclusion
Chinese Bitcoin mining thrives on low-cost hydropower, efficient hardware, and remote operations. From Sichuan’s mountains to Shenzhen’s factories, the industry blends innovation with practicality, shaping global cryptocurrency trends.