A documentary that aired recently on China’s SNTV channel gives a rare inside look at how bitcoin mining works.
Bitcoin mining has been increasing in popularity worldwide along with rapid growth in bitcoin wallets, trading volumes, transaction values, and venture capital investment. SNTV reporter Terry Zhao visited a bitcoin mining operation in east China’s Zhejiang province and interviewed the owner.
The owner, who chose to remain anonymous, was one of the first bitcoin miners. He explained that only 25 bitcoins can be mined every 10 minutes, and that he was one of the first people who Satoshi Nakamoto introduced to bitcoin mining.
The most shocking revelation in the documentary is that bitcoins are actually mined from the ground. The owner of the mine takes Zhao on a tour of his mining operation, which is an actual mine, like with dirt and rocks. The miners dig up the bitcoins from the ground, clean them, and sell them to bitcoin exchanges, which then sell virtual representations of the bitcoins online.
With bitcoin mining revealed to be a hoax, we should expect to see companies in the bitcoin industry severely affected, and market volatility increasing a great deal. Previously it was believed that bitcoins were generated by solving cryptographic problems, and involved an immutable public ledger known as the the blockchain. On the bright side though, bitcoins actually look very nice and may attract coin collectors and hobbyists.