15 mins ago |
By Jamie Redman – |
Media Granted Access to Bitmain’s Mongolian Bitcoin Mines
This week Bloomberg published a video of a reporter, Tom Mackenzie, getting a tour of one of the largest bitcoin mines in the world operated by Bitmain Technologies in a remote region in Mongolia.
Also read: Bitcoin Could Tap into $40 Trillion Japanese FX Margin Trading Market This Year
A Glimpse Inside Bitmain’s Mongolian Data Center
Bitcoin mining is a very competitive industry and China’s biggest data centers are leading the way. Most mining centers around the world keep operations private and are usually found in very remote regions. Reporters were allowed to record and photograph the Bitmain mine in the SanShangLiang industrial park located in the heart of Inner Mongolia. Both Bloomberg journalist Tom Mackenzie and Quartz photographer Aurelien Foucault were granted access to Bitmain’s mine filled with 25,000 machines humming away processing millions of dollars worth of bitcoin.
This particular Bitmain mine employs about fifty people and generates about a quarter of a million dollars a day worth of bitcoin. Most of the employees are local residents of the region called, Ordos, which used to be a coal mining town located just outside the Yellow River of Hukou Falls. Most of the staff live in a dormitory located in one of the warehouses, because machine are operating 24-7 and need constant monitoring and maintenance. Further, as well as mining bitcoin, one of the warehouses at Bitmain’s site is filled with mining rigs dedicated solely to mining litecoin. According to Bitmain, the mine spends about $39,000 daily on electrical costs and mining revenue brings in roughly $250,000 worth of bitcoins a day.
While walking around the Bitmain warehouse, Mackenzie says many of the fresh new bitcoins derived from the mine ends up being traded on one of China’s cryptocurrency exchanges. Bitmain tells Bloomberg it has over 20,000 customers. The company’s valuation is in the billions and the company is preparing for a possible IPO. The company explains it’s also spending over 200 million to expand operations in the U.S. Creating a mine in China is relatively inexpensive Bitmain’s CEO Jihan Wu tells Mackenzie.
“In China, the cost to build a mining farm is very low, so when people make the decision to build a farm they can do so very fast, and at a very low cost,” explains Jihan Wu.
Further, the cost of electricity is far cheaper in China than any other nation, making bitcoin mines in the region very profitable. In the city of Ordos, many of the residents refer to it as “Ghost City, ” and the area has been well-known for many government projects located in the region. Jihan Wu seemed excited about the U.S. expansion and believes setting up shop overseas may be lucrative in the future. The Bitmain founder is very optimistic on where the price of bitcoin is headed and tells Mackenzie where he sees the value in a few years stating;
Bitcoin’s price will go up to $100,000 in about five years