Inside the Largest Bitcoin Mine in The U.S.

[Narrator] Bitcoin hit one trillion dollars

market cap this year. [urgent music]

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.

[Narrator] 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 miner, after miner,

after miner, after miner.

[Narrator] 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.

[Narrator] 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.

[Narrator] 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 margins

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.

[Narrator] 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 Whinstone.

So 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 hot bed

for other cryptocurrency facilities.

[Narrator] In fact, Shenzen based bit mining

is coming to Texas,

and Beijing based Bitmain,

a company that designed circuit chips

for Bitcoin mining ,

is moving into the decaying aluminum plant

down the road from Whinstone.

According to the Oak Ridge Institute

For Science and Education,

$1 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 $1 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 hundred 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 3000 Watts that it's pulling.

In older miner, in older generation, The S9,

which was released in September, 2017,

was only pulling 1350.

The miners now are at 3000.

[Narrator] 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 eight 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 all the ambient air

through the miner,

and then there's an exhaust fan,

it 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.

[Narrator] Inside the heat aisle,

it literally feels like an oven.

One Whinstone 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 terahash.

[Narrator] hash rate 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 terahash,

the profitability every day for one machine is 30 USD.

[Narrator] Okay, so 30 bucks, times 30,000 miners,

times two big buildings,

nearly $2 million a day for a facility this size.

[Chad] We have a full staff of 120 employees.

We work 24 hours a day, three shifts.

[Narrator] There are definitely

some increase 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 looked 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.

[Narrator] According to the Digeconomists',

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 US household.

Bitcoin is what I like to think of as a calculator.

So it's this sort of old school,

very clunky system that gets the job done.

And you look at what's happened with newer blockchains,

like Ethereum 2, and DeFinity,

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 DeFinity Near, Flow, Polka Dot,

all kinds of networks,

really serving as the optimized internet computers,

ultimately 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.