Bitcoin mining was once feasible at home using GPU power but that’s no longer true.As the price of the virtual currency skyrocketed over the course of 2013, entrepreneurs like 31-year-old Emmanuel Abiodun began investing serious money in Bitcoin-specific mining hardware that effectively put GPU mining out to pasture.While most serious Bitcoin miners elect to keep their setups private, Abiodun recently opened the doors to his massive mining facility in Iceland to journalist Nathaniel Popper.Behind the fortified gate and multiple security checkpoints lie more than 100 mining computers, each locked away inside a metal cabinet cooled by vents on the floor.The machines, which require a massive amount of energy and produce excessive amounts of heat, are cooled primarily by the crisp Arctic air that is pumped in from outside.Abiodun, who runs a mining rental service known as Cloud Hashing, chose Iceland for the installation due to the cheap hydroelectric and geothermal energy sources.The machines mine away on the Bitcoin network 24/7.

At the end of each day, the mining haul is divided up and sent to the company’s customers.For example, the operation mined 225 Bitcoins one day last week which were valued around $160,000.The company said they keep about 20 percent of the capacity for their own use and rent out the remaining space.ethereum 90 daysSince October, the hardware has generated more than $4 million worth of Bitcoins based on current trading value.bitcoin vps cheapAt that rate, Abiodun is set to make a hefty profit in no time flat should the crypto currency continue its meteoric rise.bitcoin online sportsbookThere’s a gold rush going on these days, or a Bitcoin rush, at least.ebay bitcoin wallet

Driven by the recent swings in the value of a Bitcoin, more and more people are learning about and becoming interested in the currency.While they could just buy Bitcoins at the current market rate, others are looking to try their luck at mining Bitcoins.bitcoin neon signAnd like prospectors who traveled west during the Gold Rush of the 19th century, many Bitcoin miners will find that they spend more on chasing the Bitcoin dream than they’ll ever hope to win back.acheter bitcoin europeAs explained here, Bitcoins are “mined” by unlocking blocks of data that “produce a particular pattern when the Bitcoin ‘hash’ algorithm is applied to the data.” It seems simple enough, but the cost of Bitcoin mining is greater than one might expect.trust will kill bitcoin

The more Bitcoins are mined, the more difficult it becomes to find the next block.Unless the miner is using the latest specially-designed mining rigs, the computers used often sport high-end graphics cards (since the GPUs are more efficient than CPUs for mining application).ethereum pool coAnd running those computers requires a lot of power.bitcoin etf filingBlockchain.info, which tracks Bitcoin-related data, estimates that miners are using 1,005.59 megawatt hours of electrical consumption each day in their pursuit of new blocks of Bitcoins.That ends up costing about $150,000 in power costs each day to mine the currency.[Hat tip to Bloomberg for reporting on the data.] That may sound like a lot, but miners on average are making money.According to Blockchain, miners are generating $470,000 in Bitcoin-related revenue per day.In fact, due to the recent interest in the virtual currency and its popularity, operating margins for Bitcoin miners are close to record highs.

While it might be easy to look at those numbers and think it’s NBD to just like, extract value out of thin air, Bitcoin mining isn’t as lucrative as it seems.Regular users hoping to use their regular computers to mine shouldn’t expect to just start making money by setting aside a few compute cycles to dig up Bitcoins.That’s generally reserved for special mining computers that do nothing BUT mine for Bitcoins using custom encryption processors.As Biggs points out in his article, “While you could simply set a machine aside and have it run the algorithms endlessly, the energy cost and equipment deprecation will eventually cost more than the actual Bitcoins are worth.” That’s been confirmed by my colleague Matt Burns, who wrote in our internal message board that “after mining for a few days, the energy required to run my computer at full tilt was far greater than the Bitcoins I mined.” Even if you do choose to pool your resources to mine, it’s a fairly complicated process, even for tech-savvy users.

Check out the aforementioned article by Biggs for how he connected his home PCs into a Bitcoin-mining pool.The alternative is to just buy specialty hardware designed to do nothing but mine for Bitcoins.Like any other investment, the return isn’t assured, and likely will be based on how Bitcoin market takes shape as time goes on.But right now, as with most gold rushes throughout history, it’s those who are supplying the miners that are finding the real riches.The digital currency Bitcoin was invented in 2008 and began making headlines in 2013, attracting converts and speculators alike.Bitcoins are “mined” using powerful computers that solve mathematical formulae to generate pieces of computer code that represent financial value.The process of mining them profitably requires such immense computer power that “server farms” full of hundreds of machines, all accompanied by fans blowing nonstop to keep them cool, must be set up in warehouses.Once created, Bitcoins are tradable in some markets, though many countries have banned or restricted the use of Bitcoins, and the People’s Bank of China (PBOC) banned commercial banks from dealing in the currency in 2014.

Nevertheless, China has become one of the world’s leading markets for and producers of Bitcoin.In 2013, the price of one Bitcoin exceeded $1,000.As irrational exuberance over the virtual currency subsided, the price fell to below $200, but in recent months, it has been on the rise again.It’s currently back up above $750.We talked to Eric Mu, a Chinese entrepreneur who runs SinoHash, a Bitcoin mining facility in China, and says he became engrossed with the idea of a monetary system that could bypass the state.China provides a natural place for Bitcoin to take off, Mu believes, and he has staked out his plot in the virtual mining community while Chinese regulators have been content with a soft approach.Jeremy: What is SinoHash, and what is your role?Eric: SinoHash is a Bitcoin mining facility based in China.Like other mining facilities, it generates revenue in Bitcoin by running a large amount of dedicated computing equipment that consumes a large amount of electricity — one megawatt in our case.

In the Bitcoin system, mining serves the function of securing the network against fraudulent transactions and miners are rewarded for contributing this utility.SinoHash is also a miner hosting service — customers buy hardware equipment and ship them to our facility.We operate them and charge $0.045 for every kWh of electricity their machines consume.This service is not unique for people who are familiar with the space.There are facilities located in the United States, too.Our facility is located in Shimian, Ya’an Prefecture in Sichuan Province.The decision was made mainly due to the cool climate and cheap power supply.Our cheap electricity is a main draw for clients.Also, most households don’t have the space or time required for the upkeep of a large number of mining rigs, which generate a great amount of heat and an unpleasant level of noise.But we have appealed to a small group of investors and it has been fairly lucrative over the past few years.Jeremy: How did you get into the Bitcoin business?

Eric: I first learned about Bitcoin in 2013 and quickly grew engrossed with it.The idea of government-less currency resonated with me and I began to look for ways to get more involved.I tried a few jobs at Bitcoin startups and this eventually led to building my own Bitcoin mining facility and hosting service.Jeremy: How would you describe the Chinese government’s attitude to and regulation of Bitcoin and other cryptocurrencies?Eric: The Chinese government doesn’t have an explicitly formulated attitude as far as I know toward Bitcoin and the industry at large.There is evidence that it is concerned with a potential speculative bubble, which is often attributed to its ban of banks from directly handling Bitcoin-related business.Some government departments, the People’s Bank of China in particular, have recognized the innovativeness of the technology and dedicated resources to studying it, in an apparent bid to apply its underlying technology — blockchain — in building its own digital currency.

When it comes to mining, there is little regulation and interference.Personally, I think that Bitcoin has outgrown the stage where a single government can profoundly affect its development, so I am not too concerned with the Chinese government’s attitude.Jeremy: How many people do you estimate are trading Bitcoin and other cryptocurrencies in China?Eric: Due to the nature of Bitcoin, there has been lack of reliable data in this regard.There is a small group of frequent day traders — my guess is a few tens of thousands.Meanwhile, there is a much larger population of people who occasionally buy and sell to fulfill a need.They often do this through face-to-face transactions or social payment tools, which is very hard to monitor.I, for example, often facilitate people to buy Bitcoins using WeChat payment.I have a friend, an American expat living in Beijing, who regularly buys Bitcoins worth tens of thousands in yuan every month through me, and he has done this consistently for at least eight months.