A Deep Dive in a Real-World Bitcoin Mine

At the start of August, 2017, several media were granted access to one of the world’s largest Bitcoin mines, located in Inner Mongolia (China), operated by Bitmain Technologies. Bitcoin mines typically keep their operations private, hence visits like these offer a unique glimpse into the facts and figures of a mining center. As it turns out, some of these figures are quite surprising. In fact, it can be found that the energy efficiency of this Bitcoin mine is significantly worse than one might expect, and that the carbon footprint of the mine is simply shocking.

Collecting data

To arrive at this conclusion, let’s first collect all of the available data on Bitmain’s mining operation. Bloomberg, Quartz and Tech in Asia were all among those invited to have a look in the Inner Mongolia mine. Each agency subsequently published on the information that was shared during this visit. From these publications we can collect that the mine consists of 8 buildings and 25,000 mining machines in total. Seven buildings, containing 21,000 of these machines, are used for mining Bitcoin. The remaining building, with 4,000 machines, is dedicated to mining Litecoin. The 21,000 Bitcoin mining machines represented “nearly 4% of the processing power in the global Bitcoin network” at the time, and together with the Litecoin mining machines the mine generates about $250,000 in revenue daily. The mining machines are powered with electricity coming mostly from the nearby coal-fired power plants, and costing only four cents per kilowatt-hour after a 30% discount by the local government. In exchange for this discount, the profit from the mine is taxed. The total daily electricity bill amounts to roughly $39,000, meaning the facility consumes around 40 megawatts of electricity per hour.

The mine has other costs, such as salaries for its 50 employees, but these are negligible. A single employee may earn $500 per month, but that’s just $17 per day. Even with 50 employees this doesn’t move the total daily operational costs by much more than just two percent.

Mining Machines

To get even more insight in the total processing power of this mine, Quartz was asked to elaborate on the statement that the mine represents nearly 4% of the total network. According to Quartz the employees estimated that each 1,000 miners were equal to 10 petahashes per second in processing power. All 21,000 Bitcoin mining machines together would then be equal to 210 petahashes per second in processing power. At the time, the total Bitcoin network processing power was 6 exahashes per second, hence we find that the Inner Mongolia mine represents close to 3.5% of the total network. Since the Bitcoin price around this time was $3,500 per BTC, and rapidly going up, these Bitcoin mining machines alone were already generating almost $250,000 per day (based on a total daily block reward of 1,800 coins, and 200 coins in fees).

Bitmain employees did not share any details on what type of machines were active in this facility, but pictures reveal that at least the building containing Litecoin mining machines is filled with Antminer L3+ miners. This is hardly surprising, as this is Bitmain’s most powerful Litecoin miner and the only one currently sold by the company.

Antminer L3 mining machines at Bitmain's Inner Mongolia mine

Antminer L3 mining machines at Bitmain’s Inner Mongolia mine

In line with the previous it would be expected that all other buildings, that are used for mining Bitcoin, are filled with Antminer S9 and T9 miners. These two types of machines are the most powerful Bitcoin mining machines the company has produced to date, and they are also the only two types that are currently being sold by Bitmain. Footage of the facility doesn’t immediately confirm this, as the labels on the machines are hard to read or not visible at all. The footage, however, does show employees repairing the hashboards of the machines in the facility.

Repairs on an Antminer S9 hashboard

Bitmain employee repairing an Antminer S9 hashboard

Repairs on an Antminer T9 hashboard

Bitmain employee repairing an Antminer T9 hashboard

Antminer hashboards have very distinctive features, which makes it easy to compare those shown in the footage with pictures of the hashboards that belong to the Antminer S9 and T9 series. Doing so reveals that the hashboards, that are being worked on in the footage, are indeed Antminer S9 and T9 hashboards.

Antminer S9 hashboards

Antminer S9 hashboards

Antminer T9 hashboard

Antminer T9 hashboard

Reliability Matters

The fact that Antminer T9 miners are present in the facility is actually the first interesting observation. The Antminer T9 might be Bitmain’s latest addition to the Antminer family, but at an advertised power efficiency of 0.126 joules per gigahash it is significantly less efficient than the earlier Antminer S9. The Antminer S9 runs at an advertised power efficiency of 0.098 joules per gigahash, making it 22% more efficient than the T9. Both the Antminer S9 and T9 make use of the same (BM1387) chip. The added efficiency in the S9 comes with a price in the form of less reliability. This is also the reason the T9 is explicitly marketed with the slogan “designed for stability”. The Inner Mongolia mine is faced with an average of 10 machines breaking per building per day, so the added stability of the T9 is no excessive luxury.

Bearing the heat

The reliability of the mining machines further decreases when temperatures get very high. The temperature in Ordos often exceeds 30°C (86°F) in the summer, and may even go up all the way to 36°C (97°F). The last time this happened “there was no way of keeping up with the malfunctioning machines”, according to Bitmain employee Hou Jie. But the heat isn’t only coming from the outside, as an Antminer S9 uses about 1,400 watts per hour. Practically all of this energy converts to heat, which means each of these machines generates a waste heat output of around 5,000 BTU per hour. This makes every single machine comparable to a portable electric heater, and there’s 3,000 of them in every building of the Inner Mongolia mine.

Professional miners know that you shouldn’t focus on trying to cool all of the hot air coming from the mining machines, as you’d be fighting a losing battle. Instead, the objective is mainly to get rid of all this hot air. All the miners are set up in such a way that they blast the hot air directly into an enclosed space, where it subsequently gets purged to the outside by powerful mechanical fans. The other side of the interior, where the bodies of the Bitcoin mining machines reside, is kept cool with the help of evaporative coolers. As the hot outside air comes in, it evaporates the water that is doused over special cooling pads.

Cooling pads are doused with water

Cooling pads are doused with water

Although it’s hard to determine how much the cooling system adds to Bitmain’s electricity bill exactly, there is sufficient information to create an estimate. We know all eight buildings of the Inner Mongolia mine combined consume 40 megawatts of electricity per hour. This is 5 megawatts of electricity per hour per building on average. Given an energy consumption of about 1,400 watts per hour per Bitcoin mining machine, we find that 3,000 of these machines make up at most 80% of the electricity consumption per building. We can thus conclude that the whole cooling system combined must be responsible for at least 20% of the electricity bill of this facility.

The real percentage is very likely to be higher, as the Bitcoin mining machines in this facility don’t seem to be running at full capacity. The employees estimated that the average processing power per machine was only equal to 10 terahashes per second, despite the fact that both the Antminer T9 and S9 would normally put out at least 12 terahashes per second. But we also know each machine has a controller that samples the ambient temperature and sets the fan speed and the voltage and clock speed of the machine accordingly. During a hot summer this will result in the controller tuning the machines down to keep the chips cool. As a result, it’s not hard to see how the cost of cooling could easily approach 30% of the electricity bill for the Inner Mongolia mine. Such a number would also be in line with a recent comment by BitFury CEO Valery Vavilov, who stated that “many data centers around the world have 30 to 40 percent of electricity costs going to cooling”.

Energy efficiency of the mine

The reduced performance of the Bitcoin mining machines along with the cooling requirements have a significant impact on the energy efficiency of the whole mine. Whereas the default expected electricity consumption of an Antminer S9 machine is equal to 0.098 joules per gigahash, the electricity consumption a lot closer to 0.17 joules per gigahash in a large-scale operation like the Inner Mongolia mine. The mine’s real-world efficiency is therefore 70% above the theoretic optimum.

Carbon footprint

The former explains why the electricity consumption (and the linked environmental impact) of Bitcoin mining may be a lot bigger than some might expect, but not how significant this impact really is. Fortunately, knowing the Inner Mongolia mine draws its electricity from coal-fired power plants, it’s also quite easy to estimate the carbon footprint of the facility. The emission factor should realistically be somewhere range of 0.6 to 1 kg CO2 per kilowatt-hour of coal electricity. At 40 megawatts of electricity per hour that comes down to a footprint of 24-40 tons of CO2 per hour. To put this into perspective, consider that on an international flight a Boeing 747-400 typically emits 92 kg CO2 per passenger per hour, given that all seats are taken. On 416 seats that’s 38 tons of CO2 per hour in total. The carbon footprint of the mine could thus equal that of a flying Boeing 747-400. With the Bitcoin network processing roughly 300,000 transactions per day, or 12,500 transactions per hour, the previous means that only this facility translates to a footprint of between 2 and 3 kg CO2 per transaction. Since the mine produces 3 Bitcoins per hour ($250,000 / $3,500 / 24), it also comes down to 8 to 13 tons of CO2 per mined coin.

It should be kept in mind that the Inner Mongolia mine made up only 3.5% of the total Bitcoin network at the start of August (the network has expanded significantly since). In terms of electricity consumption, the mine could even make up an even smaller percentage of the total network, as it concerns one of Bitmain’s own mines (and therefore most likely one of the most energy efficient ones in the network). Potentially, this means the full network could have the same carbon footprint as 18-30 airborne Boeing 747-400 airplanes (55 to 91 kg CO2 per transaction), despite the network processing only a fraction of the global payment volumes (VISA alone processes 800 times more transactions then Bitcoin). The total carbon footprint could be lower simply due to the fact that other mines may be using electricity from cleaner sources (like hydropower), but then again, the discussion on the emissions of greenhouse gasses by hydroelectric dams is still ongoing. In any case, Bitmain’s Inner Mongolia mine teaches us that the carbon footprint of a single Bitcoin transaction could be equal to that of being a passenger during one hour of flying a Boeing 747-400, or driving a Hummer for 200 kilometers (~120 miles). It’s about time that companies that accept Bitcoin as a payment method start contemplating what this means in terms of corporate social responsibility and sustainability.

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