Beijing (AsiaNews/Agencies) – Sichuan, in south-western China, is considered by experts to be Bitcoin mining central.
Bitcoin, a virtual currency used as a monetary system independent of central banks and governments, is booming as an investment asset and form of payment.
China has become one of its main exchange markets, although the currency exists in a legal limbo and is prone to speculation.
Nevertheless, it allows Chinese investors to get around stringent government controls over the traditional financial system.
The crypto-currency is held in computer servers, and is “mined” through complex algorithms and recorded in a digital bank accounts.
China is home to some of the world’s biggest “mining pools”, where clusters of supercomputers mint the new Bitcoins and maintain the system.
Some of these supercomputers are installed in rural areas near power stations, and Sichuan is an ideal place for this due to its abundance of hydropower, perfect for the high energy needs of the computers required for Bitcoin mining. Electricity typically accounts for 60-70 per cent of a bitcoin mine’s expenses.
Bitcoin mines are buildings equipped with massive numbers of microprocessors where miners solve complex maths problems and are rewarded in the digital currency. Some 550 mining machines, running 24 hours, can mine 2.5 Bitcoins a day, worth around US$ 6,400.
These mines are often built next to hydroelectric plants set up along mountain streams because the latter can produce more energy than they can sell to China’s state grid, and so some plant owners have found they can either sell the surplus to Bitcoin mines or set up their own mines.
The “miners” live and work at the mines, which are so remote that the nearest public transportation can in some cases be more than 30 kilometres away from the nearest town.