bitcoin hit one trillion dollars market cap this year this has inspired some bitcoin operations to expand especially in the wake of the recent government crackdown of miners in china the ban on mining in china has caused a mass exodus to the united states to russia and to any other areas where mining facilities are available welcome to rockdale texas america's new crypto mining hub this building that's directly behind me inside of the buildings we have this shelving that's a thousand feet long 20 feet tall and there are just minor after minor after minor afterminer we went inside north america's largest bitcoin mine to understand how it works and its energy footprint what is a miner it is a small computer they call it an asic miner it is made to solve problems and when they solve that problem it feeds into the bitcoin network when it feeds into the bitcoin network you receive a reward to help us understand crypto's reward system a little better we spoke to blockchain expert bettina warburg that's what mining is it's a process by which people are contributing computing power and earning a reward for essentially participating in this process that secures a network everybody's using the same software that allows them to connect together and participate in a governance structure that's shared it seemed like only yesterday that one person with a handful of computers crunching numbers in their apartment could make money from mining bitcoin so how do we go from there to here just like with many industries you start small the guy in the garage started the process he mined bitcoin i believe the reward was around 50 bitcoin for every block reward now it is at 6.25 in some ways cost equals energy expenditure this is just the nature of technology we see updates and innovation and people driving margin and driving their cost of operation down in order to reap the greatest reward so you get mining operations that happen in places where power is less expensive typically mining operations go where energy is cheap right now texas has some of the lowest kilowatt hour prices in america that's due in part to a deregulated energy market which means several providers compete to snag big customers like windstone there's environments like iceland russia china canada areas like iceland and canada have a cooler environment there's probably less dust in those areas the miners run at a cooler temperature cryptocurrency is about the low-cost provider texas is becoming a hotbed for other cryptocurrency facilities in fact shenzhen based bitmining is coming to texas and beijing based bitmain a company that designs circuit chips for bitcoin mining is moving into the decaying aluminum plant down the road from windstone according to the oak ridge institute for science and education one dollars worth of bitcoin takes 17 megajoules of energy to mine that's more than double the amount of energy it took back in the day to mine one dollars worth of copper gold and platinum the machines require more power and more power requires larger capacity bigger transformers higher voltage ultimately the energy intensiveness comes from the fact that solving these mathematical puzzles is challenging and you have to expend a certain amount of compute power against it to be the fastest one to actually solve the puzzle and putting as much computational energy into that challenge as possible increases your ability to actually win it's intentionally inefficient each building is a hundred megawatts for each 100 megawatt building you can fit 30 000 new asic miners in it in a bitcoin mine the consumption is basically taken by the miners each miner has about 3 000 watts that it's pulling an older miner an older generation the s9 which was released in september 2017 was only pulling 13.50 the miners now are at 3 000.
So at capacity this facility will have 750 megawatts of electricity flowing through it enough to power 150 000 texas homes during peak demand that's a lot of juice how do they manage to keep all those miners cool our ideal goal is to keep the ambient temperature around 81 degrees there's a lake about a mile from here and so underground we have a 8-inch line with a thousand gpm pump where we pump literally the water through this mile long pipe into the facility and it actually goes into holding tanks that then recirculate the water and it pumps it back into these evaporative cooling walls that are 12 feet tall water is actually dripping down the wall of that evaporative cooling cell and then as the air comes through it it actually cools from 16 to 20 degrees difference between the front of the wall and the inside of the wall the miners have fans they have intake fans and there's thousands of those fans running and they actually suck control the ambient air through the miner and then there's an exhaust fan actually pushes the air through the chips and into the heat aisle as it goes through the miner it then heats up because the chips that's a processing so it gets really hot and then we capture the heat on the inside of the heat wall and then it is evacuated out of the building through a quote-unquote chimney-like environment inside the heat aisle it literally feels like an oven one windstone employee estimates that it can get as hot as 140 degrees fahrenheit in here so the s9 has a hash rate of 13.5 terahash the new s19s are 110 tara hash hashrate measures how many computations a miner can do usually in a second so how much money can each miner potentially make each day currently a s19 with 110 tara hash the profitability every day for one machine is 30 usd okay so 30 bucks times 30 000 miners times two big buildings nearly two million dollars a day for a facility this size we have a full staff of 120 employees we work 24 hours a day three shifts there are definitely some increased efficiencies on the horizon such as faster processing chips for the miners cooling them in immersion technology but at approximately 73 terawatt hours annually bitcoin's energy consumption is more than the energy it takes to run every single television set in america i think ultimately the energy consumption question is a bit of a what is it relative to when we look at our financial system as a whole or even just wall street to power wall street which runs almost entirely off of computation today anyway and high frequency trading algorithms when you look at mining just to earn bitcoin well that's not necessarily so awesome according to the digiconomist's bitcoin energy consumption index one bitcoin transaction takes more than 1500 kilowatt hours to complete that's more than 50 days of power for the average u.s household bitcoin is what i like to think of as a calculator so it's a sort of old-school very clunky system that gets the job done and you look at what's happened with newer blockchains like ethereum two and dfinity is that they've actually implemented a totally different system for essentially doing the same thing and ethereum is upgrading to more energy efficient way of securing the network and the future will be about a lot of these different internet computers battling it out for adoption so you'll see dfinity near flow polka dot all kinds of networks really uh serving as the optimized internet computers ultimately the value will come from the amount of applications and tools and things that you can build and do on top of this computing architecture you know i think all technology creates energy consumption in certain patterns and ultimately what we have to do is make sure that what we're building is something that's worthwhile and that we actually want in our society
