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Bitcoin mining: China clamps down on booming trade where some can earn £60,000 a day | Science & Tech News

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From the outside, it looks like the sort of huge industrial site typical of West China. A dry, dusty corner of the country where 3,000 people are at work.

But beyond the security gates at the main entrance, behind a padlocked and guarded door, is something entirely different: a secret Bitcoin mining farm.

“The government in China, they shut down some mining farms in Inner Mongolia already,” says the owner of the mine, who has asked to be referred to as M.

Our contact, M, says the government doesn't know about his site - yet
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Our contact, M, says the government doesn’t know about his site – yet

“We don’t know what their next move is. So it’s better to keep low.”

Does the government know about this?

“No, not right now.”

We are in a new Bitcoin boom – and this is the frontier. It is a coal producing region and that abundant power is being put to a new use. 12,000 computers are at hard, noisy work, verifying transactions made worldwide using bitcoin.

In return, they earn the digital currency – about 1.5 Bitcoin each day, worth £60,000.

“This business is really profitable right now,” M says. “And our plan is to expand this business. Just the land behind this building, we plan to build a factory two times the size.”

Bitcoin is on another bull run. The price hit an all-time high of £44,025.71 on 13 March. Institutional investors including Goldman Sachs and BlackRock are piling in.

In February, Tesla bought $1.5bn (£1.8bn) worth of bitcoin and this month the company said it would accept the cryptocurrency as payment for its cars.

Bitcoin mining requires a huge amount of energy
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Bitcoin mining requires a huge amount of energy

That means there is money to be made in mining.

M used to work in real estate finance but in 2019, he switched to Bitcoin. His first mining farm was in Iran but he was cheated by his business partner there.

“The most important thing is safety,” M says. “The people here, I know them. This place, I’m familiar with. That’s why I like to choose a safer place.”

M says there are hundreds of grey sites like his across China. Bitcoin mining is not illegal, although financial institutions are prohibited from handling Bitcoin transactions.

The provincial government of Inner Mongolia is shutting down all bitcoin mines in the region
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The provincial government of Inner Mongolia is shutting down all bitcoin mines in the region

“It’s not totally inaccurate to say it’s like a wild west in China when it comes to Bitcoin mining,” says Nishant Sharma, the Beijing-based founder of BlocksBridge Consulting, which specialises in Bitcoin mining.

“Chinese miners are trying make money quick before something happens. And that something is usually related to legalities around Bitcoin mining.”

China is the world’s centre for Bitcoin mining – it accounts for 65% of the global total, according to researchers from the University of Cambridge.

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But it also requires a huge amount of energy, which has raised serious environmental concerns. The total power consumption of Bitcoin globally is more than that of Sweden, Argentina or the Netherlands.

And that’s why authorities have been clamping down.

In early March, the provincial government of Inner Mongolia announced that all Bitcoin mines in the region would be shut down by the end of April, to help it meet energy consumption targets.

Other places in China are happy to receive Bitcoin miners though – especially in the southwest, where hydropower is abundant.

“Local governments have their own targets to complete,” explains Jiang Zhuoer, the CEO of BTC.TOP. He runs a huge mining farm in the southwest of the country.

“Inner Mongolia has its own seasonal policy, but Sichuan [province] welcomes mining companies and issues some power-friendly policies on it.

“China is a big country. It’s very complicated, but in general it holds a neutral attitude [to Bitcoin].”

Our contact, M, says the government doesn't know about his site - yet
Image:
Our contact, M, says the government doesn’t know about his site – yet

Nishant Sharma argues that miners are adept at exploiting existing pools of power surplus, to help their business, rather than adding new power demand.

“Bitcoin is kind of relentless in its drive for efficiency and energy production. Because energy consumes the majority of the cost of Bitcoin.

“So miners will always find the areas around the world which have low cost and sustainable supply of energy.”

That may be true in the south, where renewable energy is plentiful – and, more importantly, cheap. But in the northern regions, the power tends to be dirty.

The reason M’s mining farm is inside an existing factory is so that it can piggyback off the existing industrial energy supply, without authorities noticing a new source of energy demand. “It also consumes a lot of electricity,” he says.

“That’s why we built this place especially for Bitcoin mining.”

The issue, in China at least, is one of supply. The country keeps building new coal power stations. They produce cheap electricity – which miners keep taking advantage of.

Perhaps there is a sustainable future for Bitcoin mining. But it hasn’t arrived in China yet.

A representation of virtual currency Bitcoin is seen in front of a stock graph in this illustration taken November 19, 2020
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Bitcoin is notoriously volatile

How does Bitcoin mining work?

Mining is essential to the Bitcoin network.

It solves the ‘double spend problem’, stopping people from spending a Bitcoin they have already spent.

Miners are essentially computers dedicated to the Bitcoin network to verify transactions.

When a Bitcoin user spends a Bitcoin – in effect, sending it to another user – they broadcast that transaction to the network.

Miners gather up hundreds of transactions in a “block”.

They then solve difficult mathematical problems to verify that block, and add it to chain of past blocks – creating a public ledger of past transactions that is effectively impossible for anyone to alter.

The more computer power you have, the better chance you have of solving these problems before anyone else.

And when miners discover the solution, they are rewarded with Bitcoin – currently the reward is 6.25 Bitcoins – worth about £270,000, depending on their value at the time.

Miners also get transactions fees from users for including that transaction in the block.

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Myanmar junta releases over 23,000 prisoners but fate of detained protesters unknown | World News

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Myanmar’s junta has claimed to have pardoned and released more than 23,000 prisoners – but it is not known if the figure includes pro-democracy activists detained in the wake of February’s coup.

The release was announced to mark the new year holiday.

State broadcaster MRTV said Myanmar‘s military leader Senior General Min Aung Hlaing pardoned the 23,047 prisoners, including 137 foreigners who will be deported.

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The strongest weapon in Myanmar is a phone

He also reduced sentences for others.

Early prisoner releases are customary during major holidays, but this is the second time the ruling junta has done so since it ousted the elected government of Aung San Suu Kyi, triggering daily protests, arrests and deaths by security forces.

According to the Assistance Association for Political Prisoners, which monitors casualties and arrests, government forces have killed at least 726 protesters and bystanders since the takeover.

The group says 2,728 people, including Ms Suu Kyi, are in detention.

Following the release of more than 23,000 convicts to mark Union Day on 12 February, there were reports on social media that some were recruited by the authorities to carry out violence at night in residential areas to spread panic.

Heavy clashes erupted during demonstrations in Yangon on Sunday 28 March
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Heavy clashes erupted during demonstrations in Yangon on Sunday 28 March

Some areas responded by setting up their own neighbourhood watch groups.

The military said it staged the coup because a November election won by Ms Suu Kyi’s party was rigged – an assertion dismissed by the election commission.

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COVID-19: Pandemic has now killed three million across the world – as countries see surge in cases | World News

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The global death toll from coronavirus has topped three million people amid repeated setbacks in the worldwide vaccination campaign and a deepening crisis in places such as Brazil, India and France.

The number of lives lost, as compiled by Johns Hopkins University in the US, is about equal to the population of Kyiv, Ukraine; Caracas, Venezuela; or metropolitan Lisbon, Portugal.

It is bigger than Chicago (2.7 million) and equivalent to Philadelphia and Dallas combined.

However, the true number is believed to be significantly higher because of possible government concealment and the many cases overlooked in the early stages of the outbreak that began in Wuhan, China, at the end of 2019.

Worldwide, COVID-19 deaths are on the rise again, running at around 12,000 per day on average, and new cases are climbing too, eclipsing 700,000 a day.

“This is not the situation we want to be in 16 months into a pandemic, where we have proven control measures,” said Maria Van Kerkhove, one of the World Health Organisation’s leaders on COVID-19.

In Brazil, where deaths are running at about 3,000 per day, accounting for one-quarter of the lives lost worldwide in recent weeks, the crisis has been likened to a “raging inferno” by one WHO official.

A more contagious variant of the virus has been rampaging across the country.

Meanwhile, problems that India had overcome last year are coming back to haunt health officials.

Recent religious event in India could be behind the surge in cases, experts suggest
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Recent religious event in India could be behind the surge in cases, experts suggest

Only 178 ventilators were free on Wednesday afternoon in New Delhi, a city of 29 million, where 13,000 new infections were reported the previous day.

The challenges facing India reverberate beyond its borders since the country is the biggest supplier of shots to Covax, the UN-sponsored program to distribute vaccines to poorer parts of the world.

Last month, India said it would suspend vaccine exports until the virus’s spread inside the country slows.

The WHO recently described the supply situation as precarious.

Up to 60 countries might not receive any more jabs until June, by one estimate.

To date, Covax has delivered about 40 million doses to more than 100 countries, enough to cover barely 0.25% of the world’s population.

Globally, about 87% of the 700 million doses dispensed have been given out in rich countries.

While one in four people in wealthy nations have received a vaccine, in poor countries the figure is one in more than 500.

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Elon Musk’s SpaceX wins $2.9bn NASA contract to send humans to the moon | Science & Tech News

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Elon Musk’s private space company SpaceX has won a $2.9bn (£2.1bn) NASA contract to build a spacecraft to put humans on the moon.

The tech billionaire’s firm was chosen ahead of Amazon founder Jeff Bezos’ Blue Origin and defence contractor Dynetics Inc.

Steve Jurczyk, NASA’s acting administrator, said at a video conference: “We should accomplish the next landing as soon as possible. This is an incredible time to be involved in human exploration, for all humanity.”

SpaceX founder and chief engineer Elon Musk
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SpaceX founder and chief engineer Elon Musk wants to take humans to Mars

SpaceX will need to complete a test flight “to fully check out all systems with a landing on the lunar surface prior to our formal demonstration mission”, NASA official Lisa Watson-Morgan told reporters.

Mr Musk is one of the world’s richest people thanks to his 22% stake in electric car maker Tesla, now the world’s most valuable vehicle manufacturer.

His publicly stated aim is to put humans on Mars – but so far, SpaceX has mainly been used to launch satellites for his Starlink internet venture, and other satellites and space cargo.

The SpaceX programme has suffered considerable teething problems, with another failed landing for its prototype Starship spacecraft last month.

The previous three exploded at touchdown or shortly afterwards.

Those setbacks do not appear to have affected investors’ confidence in his schemes, however, as SpaceX said on Wednesday it had raised about $1.16bn (£838m) in equity financing.

SpaceX lost another Starship, here seen launching in thick fog, in a botched landing on Tuesday
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SpaceX lost another Starship, here seen launching in thick fog, in a botched landing

NASA’s plan is get back to the moon and using that as a platform to send astronauts to Mars and it is looking to team up with private companies that share its vision for space exploration.

In December, NASA announced 18 astronauts who could be involved in plans to get back to the moon by 2024.

Jeff Bezos. Pic: AP
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NASA’s decision is a setback for Jeff Bezos. Pic: AP

It’s a setback for Mr Bezos, a lifelong space enthusiast and one of the world’s richest people, who is more focused on his space venture after deciding to step down as Amazon CEO.

The NASA deal was seen as a way for Blue Origin to establish itself as a desired partner for NASA, and also putting the venture on the road to turning a profit.

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