Using cheap hydro-power and low-cost water-cooling system, this farm has achieved high ROI rate.
That one sentence pinpoints an essential aspect of the business model: cheap electricity. The following photo shows the bitcoin farm (blue roofs) colocated with a hydropower plant (red roof) in western China.
Multi-petahash BTC mine in Kangding, Sichuan, China (p.21)
Following are selected quotes from the thread, all discussing the importance of cheap electricity.
p.1
The equipment is actually relocated - the new location has cheaper electrical rate so it makes sense to relocate. We would have bought new ones but the supply has been tight and we deem the prices for the new ones are too high.
p.4
The electricity price in the new site is 43% cheaper than the previous one that we relocated from; the downside is that we will have to invest about RMB 4 million in the infrastructure. While the facility right now is filled with old machines of our own (about 5.3P), we have two warehouses under construction and are also looking to buy 6P worth of secondhand miners.
p.11
As some of you already know, I had been traveling. Right now I'm writing from my hotel room in Dalad Banner, a county-level administration in Inner Mongolia with a population of 0.34 million (according to Baidu Zhidao, the Chinese Wikipedia ). [...] The bus ride took 10 hours to bring us from the nameless valley we are located in to Chengdu. We arrived in late evening. We stayed in Chengdu that night and boarded the airliner from Chengdu to Hohhot the next morning. [...]
In the middle of nowhere, we saw this mammoth mine - I was told that it consumed half of the electricity the rest of the county collectively uses. Though I can't verify its claim being Asia's largest, it is obviously larger than ours in Kangding. But the thing is that the electricity that was regarded cheap a couple years ago, was no longer when compared with the newly discovered western Sichuan hydropower, so don't be surprised that it will be emptied over the next few months.
p.15
One caveat of relying on hydropower is that in winter, the supply is likely to be limited. • Q: Can you elaborate on why the hydropower would be limited in the winter? Something freezing somewhere? Electricity needed elsewhere? [...] Most likely the water freezes during the winter so the flow to the hydro station is substantially reduced. • A: More to do with the local precipitation pattern than temperature. We have been thinking of building mobile mines that can be towed by trucks like trailers.
p.16
[Quoting an external source] In spite of the a bright picture painted by the central government's "One Belt And One Road" plan for China's hydropower future, in parts of the country, imbalance of electricity consumption and development remains. Large amount of hydropower is "wasted", new projects are getting increasingly technically challenging, and the resettlement are becoming more and more costly – all threatening the healthy development of the industry.
Near the end of the thread, Eric Mu says, 'the total hashrate will eventually stabilize at 21 to 25 P'. That takes a lot of electricity.
