The world of cryptocurrency has long been shrouded in mystery, but a revealing investigation by China Central Television (CCTV) has pulled back the curtain on one of the most surprising facts in digital finance: approximately 70% of the world’s Bitcoin is mined in China—often in remote, high-altitude regions far from urban centers.
This staggering statistic underscores China’s dominant role in the early infrastructure of blockchain technology, despite evolving regulatory stances. While Bitcoin itself is decentralized and borderless, its production has been heavily centralized in specific geographic pockets due to a combination of cheap energy, favorable climate conditions, and entrepreneurial drive.
How Bitcoin Mining Actually Works
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Bitcoin isn't "printed" or manufactured—it's earned through a process known as mining. This involves powerful computers solving complex cryptographic puzzles, essentially guessing the correct number in a massive computational race. Every time a miner or mining pool finds the correct solution, a new block is added to the blockchain, and the miner is rewarded with newly minted Bitcoin.
These operations aren't run on standard desktops. Instead, they rely on specialized hardware called ASICs (Application-Specific Integrated Circuits)—high-efficiency machines designed solely for mining cryptocurrencies. Thousands of these devices operate 24/7 in facilities known as mining farms, generating heat like industrial plants and consuming vast amounts of electricity.
Inside a Chinese Bitcoin Mine: High Altitude, High Output
In the remote Sichuan plateau, where elevations exceed 4,000 meters, journalists discovered massive mining facilities disguised as unassuming industrial buildings. Inside, rows upon rows of server racks hum with activity—each metal box housing a mining rig working nonstop.
One mid-sized facility, occupying just a three-story building, houses over 5,000 mining machines supported by dozens of industrial-grade cooling fans. Despite being classified as medium-scale by industry standards, this single operation produces around 16 Bitcoin per day.
At a market rate of roughly $3,000 per Bitcoin (based on 2017 values), that equates to over **300,000 RMB (~$43,000 USD)** in daily revenue—highlighting the immense profitability that fueled the mining boom.
Why China Dominated Early Bitcoin Mining
Several key factors contributed to China’s overwhelming share of global mining capacity:
- Abundant Renewable Energy: Provinces like Sichuan and Yunnan generate surplus hydroelectric power during rainy seasons. This low-cost, renewable energy source made it economically viable to power energy-intensive mining rigs.
- Cool Climate: Cooler temperatures at higher altitudes naturally reduce cooling costs—a major expense in data centers where machines generate extreme heat.
- Manufacturing Advantage: As home to major ASIC producers like Bitmain, China had direct access to cutting-edge mining hardware before much of the world.
- Entrepreneurial Ecosystem: A rapidly growing tech-savvy investor base saw early opportunities in cryptocurrency and moved quickly to scale operations.
Mining farm operators reported a surge in interest throughout 2016–2017. Some investors built their own facilities, while others opted for colocation services, renting space and power within existing farms. It was common to see handwritten labels on machines identifying individual owners—a testament to the decentralized nature of ownership even within centralized physical setups.
Geographic Hubs of Cryptocurrency Mining
While mining operations existed across the country, four regions emerged as dominant hubs:
- Sichuan: Known for seasonal hydropower surpluses, offering near-zero marginal cost electricity for six months of the year.
- Yunnan: Similar to Sichuan, leveraging monsoon-fed rivers for cheap hydroelectricity.
- Inner Mongolia: Provided consistent coal-powered energy and cold winters ideal for cooling.
- Xinjiang: Rich in both coal and wind energy resources, supporting large-scale industrial operations.
Together, these regions formed the backbone of global Bitcoin production during the late 2010s.
Frequently Asked Questions (FAQ)
Q: Is Bitcoin mining still legal in China today?
A: As of 2021, mainland China banned cryptocurrency mining and trading activities. Most large-scale operations have since relocated to countries like the U.S., Kazakhstan, and Russia. However, during the period covered by this report (2017), mining was fully operational and largely unregulated.
Q: Why did so many miners choose remote areas?
A: Remote locations often offered cheaper land, lower electricity rates, and less regulatory scrutiny. Additionally, cooler mountain climates helped manage heat output without expensive cooling systems.
Q: How does mining affect local electricity grids?
A: In some regions, mining placed significant strain on local infrastructure. However, in areas with surplus renewable energy (like Sichuan), miners helped absorb excess capacity that would otherwise go unused.
Q: Can individuals still mine Bitcoin profitably?
A: With modern ASICs and rising network difficulty, solo mining is no longer feasible for individuals. Most participants now join mining pools to combine computational power and share rewards.
Q: What happened to these Chinese mining farms after the ban?
A: Many were shut down or relocated overseas. Some operators moved equipment to North America and Central Asia, where energy costs and regulations are more favorable.
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The Global Shift After China’s Exit
While this article highlights China’s historical dominance in Bitcoin mining up to 2017—and continuing until regulatory crackdowns intensified in 2021—the landscape has since shifted dramatically. The exit of Chinese miners created opportunities worldwide.
Countries like the United States (particularly Texas), Kazakhstan, and Canada have stepped in to fill the void, attracting former Chinese operators with stable regulatory environments and scalable energy solutions. Nevertheless, China’s foundational role in building the global mining ecosystem remains undeniable.
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Final Thoughts
The revelation that 70% of Bitcoin originated in China is not just a footnote in financial history—it's a pivotal chapter in understanding how decentralized networks can still form highly centralized production structures based on geography and economics.
Though regulations have changed and operations have moved offshore, the legacy of China’s mining boom continues to influence the global cryptocurrency ecosystem. From hardware innovation to energy consumption debates, the lessons learned during this era remain critical for anyone studying blockchain's evolution.
As the industry matures, transparency, sustainability, and accessibility will shape the next phase of digital currency development—building upon the infrastructure pioneered in those remote mountain data centers.