Bitcoin's Scaling Debate: The View From China's Miners

Researcher Paul Ennis sheds light on China's bitcoin mining community, often viewed as one important political faction in the scaling debate.

AccessTimeIconMay 13, 2017 at 10:00 a.m. UTC
Updated Aug 18, 2021 at 6:09 p.m. UTC

Presented By Icon

Election 2024 coverage presented by

Stand with crypto

Paul Elliot-Ennis is a lecturer and assistant professor in management information systems in the College of Business, University College Dublin, while Rachel-Rose O'Leary is an artist and writer researching cryptographic systems. 

In this guest feature, Elliot-Ennis and O'Leary investigates the daily activities and political attitudes of China's well-established bitcoin mining sector, positioning his findings within the context of the network's scaling debate.

  • Bitcoin Mining in the U.S. Will Become 'a Lot More Decentralized': Core Scientific CEO
    13:18
    Bitcoin Mining in the U.S. Will Become 'a Lot More Decentralized': Core Scientific CEO
  • Binance to Discontinue Its Nigerian Naira Services After Government Scrutiny
    05:10
    Binance to Discontinue Its Nigerian Naira Services After Government Scrutiny
  • The first video of the year 2024
    04:07
    The first video of the year 2024
  • The last regression video of the year 3.67.0
    40:07
    The last regression video of the year 3.67.0
  • At present, the bitcoin community is engaged in a voracious debate about how best to scale the network. But in such a context, it's sometimes all too easy to overlook the human figures involved in that debate.

    Positioned on one side are the Bitcoin Core developers, (a term many wish to avoid reifying) but who nonetheless are recognizable as a cadre of sorts. On the other side of the debate, underrepresented and frequently misunderstood, are the China-based mining pools and hardware providers.

    We reached out to three mining pools – AntPool, Bixin and BW – to get a varied perspective on how they feel about Western attitudes toward them, but also how the day-to-day operations of mining occur.

    Bitcoin culture can, at times, be argumentative, and this is at least partially attributable to the communication gap between China and the English speaking world. Virgilio Lizardo Jr, head of international for Bitbank Group (owners of BW pool), describes the language barrier between China and the English-speaking world as "immense", leading to a dialogue blighted by miscommunication.

    One significant effect of this divide, Virgilio emphasized, is that due to the lack of Chinese presence on English-speaking bitcoin forums, stereotypes of Chinese miners continue to proliferate.

    The sentiment is echoed by perhaps the most well-known Chinese miner of them all, Jihan Wu, co-founder of Bitmain, the operator of AntPool.

    He told CoinDesk:

    "A lack of a common discussion field has allowed for the creation of an echo-chamber in the technical community outside China, where the voice and interests of the Chinese miners are misunderstood and not represented."

    Nature of the problem

    Lizardo, a transposed Westerner with a strong sense of Chinese culture, noted that one overlooked issue is that the miners have no obvious media outlet to get their position across, leading to distorted narratives and the compounding of mistrust.

    He further emphasized that there is a tendency to group the Chinese miners together as a single "monolithic entity".

    However, their visions for the future are predictably diverse. While Wu is an open supporter of Bitcoin Unlimited, positions toward the scaling debate vary enormously across the miners.

    Asked for his opinion, Tyler Xiong of Bixin, formerly HaoBTC, argued the importance of maintaining a single implementation of the protocol and a healthy community, stating: "We don't want the breakup of bitcoin".

    This is contrary to Wu, who commented:

    "I believe multiple implementations are healthy for the bitcoin ecosystem."

    Business priorities

    Wu also stressed that it is important to recognize that the mining operations in China and elsewhere are businesses, each with their own agenda and strategies.

    According to Wu, while there is a general consensus among miners that bigger blocks are needed, "most miners prefer to stay away from the discussion" and focus on the daily operation of their businesses.

    As is well-known, information about the actual, day-to-day mining operations in China are hard to come by. Occasionally, we will get photographs or videos of vast-industrial warehouses packed with whirring mining machines, but not much more.

    Often situated in the depths of the Chinese countryside they are, admittedly, aesthetically powerful: equal parts industrial traditionalism and science fiction. Most of the miners confirmed what many have long-known about why China cornered the mining market – cheap electricity.

    Wu, arguably the most successful mine operator in the history of bitcoin, said the most challenging part of planning a new mining farm is finding access to a low-cost and reliable electricity supply. Lizardo also reported that while constructing a mine is not difficult the "logistics of transporting thousands of miners is challenging."

    Tyler painted a picture of what occurs once construction is complete:

    "The daily job includes 1) the installing, maintenance and repairing of miners and other facilities, and 2) monitoring the temperature in different areas of the mining farm. It requires a lot of passion because there are tens of thousands of miner at the same time and you want all of them are available 24/7."

    Important function

    At BW pool, most of the labour is drawn from local communities, trained by the company to become technicians and maintenance workers. Each miner we spoke to stressed that looking after the mines was a 24-hour job, requiring constant supervision by employees.

    Jihan highlighted this same phenomenon, stating:

    "You need to human resource to constantly look after the farm, you need to maintain constant and direct communication with the investors of your farm, you need to maintain the mining equipment."

    The take home across all the interviews was that mining was, at heart, a difficult, costly and time-consuming job.

    Further, that perhaps in the fog of endless debates we have lost sight of the important function Chinese miners have for bitcoin’s maintenance and security.

    Shanghai image via Shutterstock

    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information have been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. CoinDesk has adopted a set of principles aimed at ensuring the integrity, editorial independence and freedom from bias of its publications. CoinDesk is part of the Bullish group, which owns and invests in digital asset businesses and digital assets. CoinDesk employees, including journalists, may receive Bullish group equity-based compensation. Bullish was incubated by technology investor Block.one.


    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.