In order to mine minerals, what have the miners done over the years?

Author: Cross Country Rabbit

In recent years, with the rise of the blockchain industry and the rise of Bitcoin, this industry has gradually become known to many people. Some people have become rich overnight, while others have lost their fortunes. Mining, one of the core elements that maintain the operation of Bitcoin, was once regarded as a way to "make money without doing anything" due to the myth of getting rich quickly created by early miners.

Mining = making money without doing anything?

Of course, there is no such thing as sitting back and enjoying the fruits of your labor in this world. Even if you make money by lying down, you still need to pay for it.

As we all know, in addition to the increasingly expensive mining machines, the electricity cost required for mining is also a considerable expense. The most common mining machine costs about 3,000 yuan, and consumes about 33 kWh of electricity per day. Based on the average daily income of Bitcoin, in most cases, it takes at least 200 days to recover the investment.

(Picture from the official website of What’s Worth Digging)

As more and more people join the ranks of miners, mining has become a high-cost, low-return, and long-cycle activity. Especially in a bear market, mining cannot provide miners with huge profits, and the high electricity bills force miners to shut down their computers to save money.

Since the income is not stable, it is better to start with the expenditure, so the larger mines are looking for cheaper electricity supply all over the world. But at this time, some people with ill intentions began to have crooked thoughts.

Miners who steal electricity at all costs

According to the editor's investigation, illegal electricity theft and mining incidents have been emerging one after another in recent years.

Not long ago, in Daqing City, Heilongjiang Province, the police received a report and arrested a man who stole electricity to mine in the Daqing oil field. It was said that the man filled the fish pond in his own oil field with a two-meter-high earth bag. People thought there was some secret hidden there. When they pushed it open, they found 20 mining machines. It is estimated that the loss is about 50,000 yuan.

There was also a Tangshan woman who was arrested in May this year and made a profit of 6,500 yuan by stealing electricity for mining. After her arrest, the court sentenced her to theft. Not only was she detained for four months, but all the illegal gains were confiscated and she was fined 10,000 yuan.

Seeing this, I was really confused. Why bother? The gain is not worth the loss. The money earned by stealing is not enough to pay the fine. Some netizens even joked in the comments that Bitcoin was developed by the marketing department of the power department.

These two pieces of news are just the tip of the iceberg. Almost every once in a while, we see someone in a certain location stealing electricity to mine.

"A Bitcoin mining and electricity theft gang was arrested in Suizhong County, Liaoning Province, with the stolen electricity valued at more than 900,000 yuan"

"Taiwanese man resumes his old business of stealing electricity to mine Bitcoin, more than 800 mining machines seized"

"Man installed 80 mining machines and stole 60,000 kilowatt-hours of electricity to mine Bitcoin"

"In order to mine Bitcoin, an illegal person in Meizhou was caught stealing more than 30,000 kilowatt-hours of electricity"

From bringing mining machines into the company, using the company's electricity costs to mine, to changing the meter and line, to stealing oil fields today. These people have done everything they can. Although the criminals in the news were eventually arrested or fined, this cannot stop them. They can still find more resource-saving mining methods. The saying "there are policies from above and countermeasures from below" is the best interpretation of the unscrupulous miners.

Mining itself isn’t bad

As a result of the frequent malicious mining incidents, some countries have begun to ban mining. For example, Russia has proposed that citizens can hold Bitcoin but mining is prohibited, and Iran has even strictly prohibited the use of the national power grid to obtain cryptocurrency mining.

The National Development and Reform Commission also released a draft for public comment in April this year to eliminate the virtual currency mining industry, which means that once the proposal takes effect, mining will exit the entire domestic industry chain.

(Picture from the Guidance Catalogue for Industrial Structure Adjustment (2019, Draft for Comments))

In addition to the bad behavior of using public power for personal gain, the impact of mining on the social economy and ecological environment is also the reason why the country cracks down on the mining industry. The power source required for mining is composed of hydropower and thermal power, which have the greatest impact on the environment. In addition, the power consumption of mining is too high. Many areas have experienced power outages and even cable burns due to malicious mining.

But is mining really that bad? Many studies have shown that its excessive consumption of resources is exaggerated. The biannual mining report released by cryptocurrency research company CoinShares on June 5 showed that many large mining farms have been working hard to reduce energy consumption. The electricity resources required for Bitcoin mining each year are less than the electricity needed for Christmas lights.

(Picture from Scallion)

Last year, Spain’s largest bitcoin mining company, Cryptosolartech, also said it was building a 300-megawatt solar farm to power its mining operations.

According to data reports, about 74.1% of Bitcoin mining is powered by renewable energy.

Cryptocurrency mining giant Bitmain also planned to build 200,000 mining equipment in China in March this year to benefit from China's low-cost hydroelectric power. In addition, many domestic mining factories have moved their addresses to places with surplus resources, which not only makes electricity cheaper, but also helps the country solve the problem of surplus resources, killing two birds with one stone.

Conclusion

Since the birth of Bitcoin, it has been controversial, but its considerable value has led more and more people to join the trend of coin mining.

From an economic perspective, mining is a process of value injection for digital currency, and it is precisely because of the existence of mining costs that the value of encrypted digital currency is more evident. Putting aside secular prejudice, what really needs to be banned is not mining, but malicious mining behaviors such as stealing electricity.