Inside a Chinese Bitcoin Mine

[beamatronic]

Is there any estimate of how much income this particular mine can produce, compared the the capital outlay and the ongoing costs?

[mrb]

This operation currently mines about $262k per month:

230e9 (each machine does 230 Ghash/s) * 2500 (# of machines) * 3600 (second/hour) * 730 (hour/month) / (2^32 (average number of hashes to solve a block at diff=1) * 19.8e9 (current Bitcoin difficulty)) * 25 (BTC/block) * 590 (USD/BTC) = $262000/month

The article says their electricity bill is $60k per month. Subtract the 3 employees salaries, say $5k per month (this is China). So you are looking at a pure profit of $197k per month. Of course these profits are declining quickly over time; look how fast the difficulty has been rising: http://bitcoin.sipa.be/speed.png (logarithmic scale!)

And this mine only represents 0.3% of the total network speed (about 170,000,000 Ghash/s).

Edit: bellerocky: most exchange fees are < 1% to turn BTC to fiat.

Edit: FigBug: roughly yes, but because the network is growing, there are more than 3600 coins mined per day (blocks are solved a bit more often than every 10min).

[larrydag]

Using this calculator https://alloscomp.com/bitcoin/calculator and using 575,000 Gh/s (is that right?) the calculator gets about $260k per month. With $60K for electricity and let's say $10k for misc. overhead I would guess they are clearing close to $190k per month.

[misterbwong]

Quite interesting. What's to stop the bitcoin pool from consolidating into a few key players as difficulty to mine progresses? There's no way that the miners are spending >250k/mo and pushing bitcoins back into the system. Wouldn't this hypothetically consolidate wealth in the hands of those with enough capital to create monstrous factories like this?

[pmalynin]

I wonder about the effects of such establishments on the Bitcoin ecosystem as a whole. In theory, they're supposed to strengthen the network by providing more hashing power. But what worries me is the onset of mega-pools composed of such factories that will gain >51% of the network's computational power effectively gaining a monopoly on Bitcoin.

[EStudley]

There is no reason factories like this would WANT to disrupt the Bitcoin network if it's their source of income.. If any organization can get enough hashrate to topple the network, they will lose all that money by toppling the network.

[bdcravens]

That's the one thing that keeps eating at me. Would it not be trivial for a large corporation or government entity to throw enough money around to accomplish this? The only response I hear is that the market will magically prevent this.

[angersock]

The cables snaking everywhere and the old hardware piles give me flashbacks to Serial Experiments Lain.

All they're missing is some chrome and neon, and we're living the cyberpunk dream.

[VBprogrammer]

I wonder how much effort they've put into optimisation? Small gains (1-2% rather than order of magnitudes) for these guys obviously mean a lot more than for any bedroom operation.

[wmf]

OTOH, every day earlier that you start mining is also worth money. This favors more conservative chip design. Now that conservative 28 nm ASICs are available, they may switch focus to optimizing the design.

[b1db77d2]

They're ASIC processors. It's already set in stone (silicon, whatever).

[readerrrr]

What is their internet connection, fiber? Surely they must have a special contract or multiple providers.

[brixon]

I don't think Bitcoin is a big bandwidth user. A lot of little/small connections.

[hodgesmr]

Google Cache: http://webcache.googleusercontent.com/search?q=cache:ZwsYcfx...

[mandelbulb]

Google doesn't cache images but archive.today does: https://archive.today/8EX79