Categories: Bitcoin Tech

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

Click here to view original web page at www.coindesk.com

Dr Paul Ennis is a research assistant at The Centre for Innovation, Technology & Organization at University College Dublin, specializing in bitcoin and blockchain studies.

In this feature piece, Dr Ennis 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.

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

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