Bitcoin – we know it, we love it. Changing the way we view currency, the impact Bitcoin is having on the world has almost become immeasurable. But, for the casual investor, the idea of Bitcoin is simply as that of a commodity, with there being very little thought to where it comes from. If you’ve always wondered about the mining process – specifically where the majority of mining takes place – we suggest that you keep reading.
The following takes an in-depth look at the crypto farms that are helping push forward the digital gold rush.
Mining is an expensive process. Huge cash funding is required if you even want to make a dent in this growing market. Putting his money where his mouth is, Dave Carlson owns the biggest mining farm in North America and has stood by the “spend money to make money” philosophy. He started his mining journey with just a single GPU, since then the entrepreneur and software specialist has grown his mining operation at every available opportunity. Starting out as MegaBigPower – it’s no wonder the name wasn’t a hit – before changing into GigaWatt.
In twelve months, GigaWatt changed from being a startup into a multimillion-dollar business. According to Carlson the company’s monthly expenditure – staff salaries included – are more than $1 million. GigaWatt has emerged as a dominant mining force, with it being no coincidence that the operation is set up in Washington state, which is known for its low $8.42 per kWh electricity rate. In 2018, GigaWatt houses its operation in a warehouse somewhere in the Washington area, but much like other mining companies it keeps the exact location under wraps to avoid public attention.
From the urban reaches of Washington to the Nordic region of Iceland, Genesis Mining is a mining company that has nomadic roots. Starting out in China and Bosnia, in the wake of a changing economic climate it uprooted to Canada and Iceland. It might sound silly, but leaving the heat for a much colder climate has reaped big benefits. Iceland specifically also carries very low electricity rates, which makes it almost the perfect for a mining operation.
Given Iceland’s small stature, Genesis Mining is rumored to be the largest electricity consumer in the entire country. Once again, discovering where Genesis Mining hosts its farm is impossible, as the entire company remains tight-lipped on where it’s located.
Dalian Mining Farm
Bitcoin’s legal in status in China might be a grey area, but that doesn’t mean that the country doesn’t have a thriving mining community. The amount of Bitcoin being mined in China is nothing short of astounding. Heading up China’s mining activity is the Dalian Mining Farm. It might not have a flashy name or stylish marketing, but the Dalian Mining Farm has access to low-cost equipment and almost non-existent electricity costs. This is because the Chinese government encourages industrial-level production of crypto by reducing electricity costs for the official owners of mining farms.
What places like the Dalian Mining Farm – launched in 2016 – also buy into is how the industrial setup of China works. Housed in isolation, those running the farms often live close by, keeping a watchful eye on what’s happening in the face of distance from the outside world. China is fertile ground for Bitcoin mining in China, with the small city of Dalian at the center if it all. It actually accounts for more than three percent of the hash rate of the entire Bitcoin network – mining approximately 750 BTC per month.
Linthal Mining Farm
Switzerland as a nation has been coming around to the benefits of Bitcoin, with certain banks even now offering accounts to crypto-focused businesses. Everyone is aware of what Zug as a region is bringing to the crypto sphere, but less is known about the small village of Lithnal. Located in eastern Switzerland, it’s owned by Guido Rudolphi, a man that already had experience in running a mining operation in Zurich. After finding escalating costs tough to manage, he spent two years looking for a new home. Enter Linthal, a place that offers some of the most attractive electricity prices in the whole of Switzerland.
The new farm, which launched in 2016, calls an old factory building home. The sheer size of Lithnal Mining Farm makes it the biggest in the country, although Rudolphi insists that money is not the key motive for him. As the owner of the operation, he’s involved with mining for political reasons, as he feels that the world “needs more Bitcoin.”
Moscow Mining Farm
Russia isn’t just the largest country in the world – it’s nothing short of a mining powerhouse. There are several major mining farms in the country, all of which tend to be shrouded in secrecy. The suspected largest mining farm in Russia is located in the Moscow area, even if its exact location is unknown. The power of this Moscow farm is evident, as it’s mining around 600 BTC per month. Moscow Mining Farm is cooled by products imported from Iceland, carrying an exceptionally low electricity cost of $120,00 a month.
The future of crypto mining
Journey back two years and you’ll find that mining operations were the hobbies of Bitcoin enthusiasts. Times have changed, as mining farms in 2018 represent big businesses made up of huge technological infrastructures that are managed by a raft of employees. Look at what GigaWatt and Genesis Mining are doing, running operations at the sites of former hangars and factories. As the mining processes become more complex and expensive, small-time miners are downing tools. Mining is now a big boy’s game in every sense, so if you ever wondered where BTC comes from, you can be pretty sure that it’s a large-scale mining operation that has brought it to market.