[Deep Technology] Bitcoin Miners Say: Mining Is A 10-minute Hunger Game

ability to leave at any time

Advanced technology looks like magic at first glance.

On February 6, Bitcoin fell below the $6,000 mark. The global average price is said to have fallen below the cost of mining.

The person who bought it for a high price of 20,000 US dollars cried and fainted in the toilet.

There is a passage circulating on the Internet: A company distributed Bitcoins at its annual meeting. An employee said in his acceptance speech that first of all, he thanked the company for distributing 630,000 worth of Bitcoins to its employees; secondly, I was very lucky to win the grand prize. 590,000, so I had to plan carefully. How to spend this 570,000? After all, three hundred thousand is not a small amount...

Sure enough, a day in the monetary world is a year in the world.

There are many factors driving the currency's decline, with global regulatory crackdowns being the key. This article reveals the abnormal side of the Bitcoin mining industry: the local government once welcomed this kind of "polluting, high-tech" investment, but after the policy direction changed, everything changed.

The myth of “decentralization” is also failing. "Miner" found that the gap between the miners who have just dug out the dust and the geeks who master the algorithm is getting wider and wider.

Leaving is also an ability. If the door to getting rich overnight is closed, how many people can wake up from the magic like this "miner", recognize the reality, and start from scratch?

This article is reproduced from the WeChat public account "Yunfeng Finance" (ID: ).

Both sides of the 150-meter-long warehouse are densely packed with more than 20,000 rumbling machines.

The lights are dim and only the LED light flashes green.

Amid the loud noise and the sound of blowers and air conditioners, they made sure the warehouse didn't turn into a sauna.

However, the sultry and uneasy atmosphere remains.

This is my work environment, I'm a Bitcoin miner.

one

"The Times 03/Jan/2009 on for Banks" - the text written by "Satoshi Nakamoto" when he "mined" the Bitcoin genesis block on January 3, 2009. On the same day, the Times also published this sentence. Front page headline.

After I graduated from college where I studied computer repair, I followed the O2O trend and repaired computers at different homes. By the end of 2016, all the money the company had raised had been spent, and I was unemployed.

The situation was a little awkward at the time, but when my friend introduced me to this mining job, I almost thought I had heard wrong.

Some people in my hometown went to work in the mines when they were young, but as a college student who has stepped out of the mountains in the eyes of my fellow villagers, I feel that I have not reached the position I need. Sell ​​your energy to survive.

However, my friend quickly explained that this miner was not another miner. In fact, he still has to do computer repair work, but the work location is in the distant Ordos, Inner Mongolia.

Let's go, I can't take root in a big city, not to mention that the salary offered by the new job is actually higher than that in Beijing.

▲Ordos Bitcoin Mine

When I first walked into the workplace, which my colleagues called a "mine" but was actually a warehouse machine room, I was frightened by the huge roar and took three steps back.

The team leader responsible for leading me said that my job is to check the machines in the entire warehouse every day and test each machine with the laptop in my hand. If you find a problem, follow the steps in the operating manual - Restart - Reconnect the circuit board - Remove the machine and hand it over to the technical department.

The task sounds simple. Working hours are three shifts, one shift per month. This is not a problem. After all, in Ordos, even if I am allowed to rest according to normal working hours, there is nothing I can do.

However, after my first day at work, the first thing I did after rushing out of the warehouse was to buy a pair of headphones on Taobao. After receiving my salary for a few months, I changed to a pair of noise-canceling ones.

There is a lot of noise in the warehouse. If you don’t wear headphones, your ears will still ring when you go home and sleep, as if you were lying next to a machine.

two

"Time is money" - a slogan posted on the mine walls.

At first, I didn't know why this place was called the Mine.

During one break, I saw my colleagues gathered mysteriously in a circle, muttering something to the screen. I looked up and saw a zigzag line chart with a few English letters written on it -.

A colleague told me that these letters translated into Chinese are Bitcoins, and this computer room is where Bitcoins are mined, so it is called a mine.

But why is the word “dig” used to describe virtual things? I still can't figure it out.

My colleague couldn't explain clearly and asked me to ask the team leader. Wearing black-rimmed glasses, he looks like a technical geek. The captain must have explained it to many people. He patiently told me the rationale behind this: “Actually, compared to mining, obtaining Bitcoin is more like the gold rush that the United States and Australia experienced.

Mining gives people a sense of reward for their efforts, but panning for gold in the river is different. In addition to purely physical labor, it also requires a lot of patience and a lot of luck.

This is what mining Bitcoin feels like.

To be more precise, our mining is to participate in the "Hunger Games" that is held every ten minutes. Miners from all over the world participate in it, and the prize of the game is Bitcoin.

The reason why you see such large-scale mining operations now is because it is getting harder and harder to obtain the prizes.

There are many reasons behind this. For example, more and more miners are getting involved. There are now 180 mines like ours in China alone, and most of the new mines are in uninhabited places such as Iceland and Russia.

But at the same time, the prize money for a single game is getting smaller and smaller. This was stipulated by "Satoshi Nakamoto" when he created Bitcoin. Prior to 2012, each game could generate 50 rewards. After that, it is halved every four years, which means that now in 2017, each game will only generate 12.5 rewards. And this game has a clear end time. When the number of Bitcoins reaches 21 million, it will end completely. It is expected to be around 2050.

Not only that, the difficulty of each game is also increasing. How to say? Because this game is essentially about guessing numbers (Editor's note: To be precise, the essence of mining Bitcoin is to repeatedly calculate the hash value of a random string and check whether the header of the resulting string has enough zeros.), But the team leader’s article was not wrong when he said it was a guess. ) In order to control the pace of posting, the number of correct answers becomes increasingly complex. A number that miners might have guessed ten times before may not be correct now even if they guessed it a thousand times.

So we have to post "Time is Money" on the walls of the mine, because time really is money here - the sooner you try, the more likely you are to get new Bitcoins. "

At this time, the captain suddenly stopped and looked at me.

As I was still processing what he had just said, I suddenly realized that he thought I was wasting my time at work.

When I got back to work, I realized there was actually a more important question I hadn’t asked – what about getting a Bitcoin bonus? Why should we participate in such a game?

three

"I'm very angry. I changed my graphics cards after graduation, but all of them were out of stock, and the remaining ones are ridiculously expensive!" - An anonymous comment from a graphics card store on Tmall in July 2017.

I figured out the answer to this question myself very quickly when a colleague taught me to look at Bitcoin price charts.

At that time, it was only early 2017, and one Bitcoin was worth about US$1,000, which was more than 6,000 RMB. Obviously, in a game that gives out $700,000 in prizes every 10 minutes, there's really no reason not to participate.

I quickly learned the ropes of this game - there are no tricks.

The so-called mining algorithm, that is, the method of guessing numbers, is actually fixed and simple, and there is nothing that can be improved.

So there is only one way to win the game, and that is to find the hardware that can execute the algorithm the most times per unit time. In addition, 1+1=2, whoever has the most such hardware is most likely to win the game.

I also learned from colleagues that the entire history of Bitcoin mining is actually the history of mining hardware iterations.

In the creation era, everyone used ordinary computer CPUs to mine. This is a wonderful era where individuals can mine.

By 2010, it was discovered that GPU chips produced by AMD had a specific computing component that could speed up the critical step of guessing numbers. As a result, “GPU miners” assembled from multiple GPUs quickly replaced regular computer miners – even recently. Why have graphics cards been different from other computer hardware over the years? Prices often rise instead of falling, and stock is always out of stock.

▲The representative graphics card of GPU mining machines at that time——R7 260X Terminator

At the end of 2011, the FPGA (field programmable logic gate array) mining machine was born. Since it eliminates unnecessary image computing hardware units in the GPU, efficiency is greatly improved.

It was then that the first mines appeared. However, the mining field was still in its infancy at the time, and miners still mainly referred to personal computers quietly mining around the world.

The mining machine I maintain every day is already the fourth generation and is an ASIC chip machine. Compared with FPGA, ASIC chips sacrifice flexibility and are specially built for guessing mining, and the efficiency has once again made a qualitative leap.

If you make a simple comparison, the mining speed of CPU is 1, then the mining speed of GPU is about 10. Although the FPGA mining machine has a speed of only 8, its power consumption is 40 times lower than that of the GPU, which has a mining speed of 10. The ASIC is 2000 and the power consumption is comparable to the GPU.

In this way, it is easy to understand why the other three types of mining machines were quickly driven out of the market as soon as ASIC chips came out.

In addition, mines have become the main force of mining at this stage. Because a mainstream ASIC chip mining machine, such as Antminer S9, sells for more than 10,000 yuan. At this time, if you want to mine Bitcoin, you need at least hundreds of S9s running day and night.

The top three mines quickly became the arena for Chinese players. The strong supply chain and manufacturing capabilities that China has accumulated in the IT field over the past few years have been fully utilized at this time.

Take Bitmain as an example. The company quickly became the global leader in mining machines thanks to its ASIC chips designed specifically for Bitcoin mining. In the past two years, his company has sold hundreds of thousands of mining machines, each of which uses hundreds of ASIC chips. For example, Antminer S9 uses 189 ASIC chips. (Editor's note: According to media reports, in December 2017, Bitmain's 10-nanometer wafer order from TSMC exceeded that of Huawei HiSilicon, the leader of the Chinese chip industry.)

I had seen Bitmain’s job advertisements when I was in Beijing before. The technical leaders who came forward to share their views were all graduates of Tsinghua University and Peking University. They are now rising technology stars in China's chip design industry.

I heard that in the first half of 2017, the company’s net profit exceeded 1 billion yuan. Then in the second half of the year when Bitcoin continues to surge, the profit level should be even more amazing.

▲Bitmain updates a large number of recruitment information every day

Four

“Bitcoin will rise to $100,000 in 10 years.” - The latest prediction from Saxo Bank analyst Van, who successfully predicted the price trend of Bitcoin in 2017.

Time flies so fast, and in the blink of an eye I have been working in this mine for half a year.

Just when we were rejoicing that winter had turned to spring and we were no longer shivering in the cold Northeast winter nights, the captain informed us that the mine was going to be relocated.

The old employees around us were very calm about this and turned around and started packing their luggage, leaving us a group of newcomers confused and not knowing what was going on.

Later we learned that migrating like migratory birds is a common phenomenon in mines. In the winter we were in Inner Mongolia and Xinjiang, and in the summer we went to Sichuan.

But moving tens of thousands of machines is no easy task, let alone across half of China. why is it like this?

It wasn’t until I saw the new home of Sichuan Mining that I suddenly realized it.

The new working place is right next to the hydropower station, with the river rushing outside the window.

▲The mines by the Dadu River

For a mining farm, revenue = Bitcoin output × currency price – mining machine cost – electricity cost – maintenance fee and labor cost – mine depreciation fee.

What I never expected was that most of the cost was not the mining machines, which I thought were expensive, and certainly not our cheap labor costs, but the electricity bill.

In fact, as early as when I was in Ordos, I felt that the entire mine was like a charged black hole.

The captain once mentioned in a casual chat that our mine burns 40 megawatts of electricity per hour, which is equivalent to the electricity consumption of 12,000 households. Although the local government has given many discounts, it still has to pay hundreds of millions of yuan in electricity bills every year.

And this is a place once known as a "ghost town" due to its power glut.

Is there any place with cheaper electricity than there?

Yes, it was Sichuan during the summer flood season.

When driving along National Highway 301 to Kangding, Sichuan, we passed dozens of hydropower stations, large and small. The raging river water brings a steady stream of electricity to the hydropower station. In summer, this electricity is too late to be transported out. National Grid has had to force some hydropower stations to generate electricity every day of the week.

However, with the rise of Bitcoin mining farms, this situation of idle power stations no longer exists.

The new site of our mine is a neat row of blue plastic greenhouses built against the mountain. Each greenhouse contains thousands of mining machines. The electricity generated by the hydropower station supports the 24/7 operation of mining machines. Mine owners with strong financial resources often rent out entire hydropower stations to ensure power supply for their own mining machines.

Although it is only more than 20 degrees in the mountainous area in summer, as soon as the greenhouse door is opened, a heat wave will hit the face - the heat energy generated by thousands of mining machines operating 24 hours a day is much greater than those mining machines. In an ordinary computer room.

The greenhouse is equipped with air-cooling and water-cooling systems, with huge fans constantly blowing heat waves toward the water-cooling walls. It's more like a curtain made of wire than a wall. The cold water flows from top to bottom and is instantly evaporated by the hot air, taking away the heat at the same time.

How much indoor temperature can this ensure?

35 degrees.

Therefore, the frequency of mining machine damage increases greatly after arriving in Sichuan. Almost every day, I find that the circuit boards of several mining machines are baked yellow. They cannot be repaired and must be replaced.

But the team leader told us that it was still worth it. Since the marginal cost of the hydropower station is close to zero during the wet season, the mine directly purchases electricity from the power station through contracting, which only costs 4 to 5 million yuan per month, which is much cheaper than Ordos.

What to do during the dry season? I asked curiously.

The captain lamented that since the power generation capacity of hydropower stations in the two seasons may vary by five to ten times, the price of electricity will rise several times during the dry season. This is why in late summer and early autumn, miners will move to Xinjiang, Inner Mongolia and other places regardless of the severe cold.

However, I have also seen that both the person in charge of the hydropower station and the local government are very welcoming to the mine. Because we are pollution-free, green and environmentally friendly, with no industrial waste and sewage discharge, and abundant cash, we are an ideal investment target.

At the same time, government officials can also claim to the outside world that they are introducing new economic industries, the combination of big data and the Internet industry - to be precise, there is nothing wrong with this statement.

Wu

"The virtual currency 'mining' industry is a pseudo-financial innovation." - Ordos Mutual Finance Rectification Office's "Notice on Guiding the Orderly Exit of Virtual Currency "Mining" Enterprises in Our District."

My career as a miner came to an abrupt end in early 2018.

At the end of last year, the mine owner decided to relocate to Xinjiang. Unexpectedly, on January 4, just after the New Year, the Xinjiang Mutual Finance Office issued a document requesting local government departments to investigate the situation of local Bitcoin mines.

Although it did not say a direct ban, the local government took precautions and canceled the electricity price discount previously given to us on the grounds of attracting investment - the standard electricity price of the State Grid is about 0.4 yuan per kilowatt hour, and the previous preferential electricity price given to the mining farm was 0.4 yuan per kilowatt. 0.2 yuan to 0.3 yuan per hour.

The doubling of electricity prices has led to a sharp decline in mining farm profits, and the price of Bitcoin has also ended its unilateral upward trend. While our Litecoin miner was still making money, the boss decided to exit as soon as possible and ended the business with an increasingly risky policy.

He said that more and more mines are popping up in Northern Europe, Russia and even neighboring North Korea, where policy risks are less, power costs are lower, and local governments support mining development for a variety of purposes. .

▲The local electricity bill for Sweden’s giant mining farm is less than 30 cents.

In China, from the earliest ban on Bitcoin trading, to the closure of ICOs and exchanges, to restrictions on mining in various places, strong regulatory pressure has silenced these "miners" who have made huge profits in the bull market. .

As for my colleagues, most of them made some money by buying and selling various digital currencies, and then dispersed - some went to other mining farms, and some simply joined the cryptocurrency industry for professional investment.

Because I entered the industry too late and bought coins even later, I didn’t get rich from it. But working in the mines for a long time gave me tinnitus. Doctors say if you work in this environment for another two years, your hearing will be permanently damaged.

But that wasn’t the main reason I left the mines.

In fact, it was me who realized that working here wasn't even a miner.

I don’t understand hashes, I don’t understand Merkel’s roots, and I only have a vague idea of ​​blockchain and digital signatures. My only connection to Bitcoin, known as the “gold of the internet age,” is the irreparable mining rigs.

The world of "decentralization," "equality for all," and "computing democracy" envisioned by Satoshi Nakamoto has not yet arrived. The gap between me outside the mining rigs and those who control the computing power will only grow wider. big.

I am planning to apply for the postgraduate examination next year and re-enter the campus to learn knowledge. I wanted to be a real geek, not a miner.

However, the currency circle says that one day on earth is one year. When I graduate, I don’t know where this circle will be. [Editor/Security]

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