In the remote, mountainous regions of Sichuan, a surprising digital gold rush is quietly unfolding. Deep within valleys and alongside rushing rivers, thousands of powerful computers hum day and night, not for local industry or government use — but to mine Bitcoin, the world’s most valuable cryptocurrency. These hidden mining farms have transformed quiet rural towns into unexpected hubs of blockchain innovation, all driven by one key factor: cheap hydroelectric power.
The Hidden World of Bitcoin Mining
Bitcoin mining is the backbone of the cryptocurrency network. Miners use high-powered computers to solve complex mathematical puzzles — known as hash functions — that validate transactions and secure the blockchain. In return, they are rewarded with newly minted Bitcoin. This process, however, demands immense computational power and, consequently, vast amounts of electricity.
That’s where Sichuan comes in.
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Inside a Mountain Mining Farm
Nestled beside the Bajiaoxi Hydropower Station along a tributary of the Dadu River lies one of China’s largest Bitcoin mining operations, run by Tianjia Network. To reach it, journalists once drove over three and a half hours from Leshan, navigating narrow, muddy mountain roads accessible only by high-clearance vehicles.
Inside the facility, the noise is overwhelming — nearly 95 decibels — a roaring symphony of thousands of ASIC miners spinning at full speed. Rows upon rows of machines are strategically arranged to form efficient airflow channels, cooled by industrial fans running 24/7.
Lei Ke, operations manager at Tianjia Network, shouted over the din: “This room has almost 1,500 miners. We generate nearly 10 Bitcoins per day here.”
Each machine works nonstop, performing trillions of calculations per second in pursuit of the next block reward. Workers patrol hourly, using electric blowers to clean dust and repair overheated or offline units — a relentless routine essential to maintaining uptime and profitability.
Just 200 meters away, children from a nearby Yi ethnic minority elementary school play on winding mountain paths. The contrast is surreal: ancient traditions coexist with cutting-edge technology in one of China’s poorest counties now powering part of the global Bitcoin network.
Why Sichuan? The Power of Hydroelectricity
The answer lies in energy economics.
Mining Bitcoin is an energy-intensive process. Electricity often accounts for over 60% of operational costs. In cities like Beijing or Shanghai, commercial electricity rates can exceed ¥1 per kWh. In Sichuan’s rural areas during the wet season (May to October), rates drop as low as ¥0.2–0.3 per kWh — sometimes even lower when hydro stations face surplus generation.
“Where electricity is cheap, we go,” Lei Ke explained. “Mountains offer low power costs, easier noise management, and cooler climates ideal for cooling hardware.”
This logic sparked what some call the “hydro-mining boom.” Entrepreneurs realized that Sichuan’s abundant hydropower — often wasted during rainy months due to grid limitations — could be repurposed to mine digital assets.
A figure known in the crypto community as “Bao Er Ye” (Uncle Bao) popularized this idea around 2013: Why let clean energy flow unused when it can mine Bitcoin? His theory gained rapid traction. Soon, mining operators began partnering directly with small hydropower stations across Sichuan and neighboring regions.
By 2015, Sichuan had become China’s top market for Bitcoin miner sales, capturing nearly 30% of national volume. Even global mining hardware giants established service centers in remote towns like Kangding — a testament to the region’s growing importance in the crypto ecosystem.
The Seasonal Migration of Miners
But there's a catch: seasonality.
Sichuan’s hydro-dependent mining farms face a major challenge each winter. During the dry season (November to April), water levels drop, electricity becomes scarcer, and prices rise — sometimes doubling.
To stay profitable, many operators pack up their equipment and migrate northward to coal-powered facilities in Xinjiang, Inner Mongolia, or Ningxia, where cheap thermal energy dominates.
It’s a modern-day digital nomadism — likened by insiders to beekeepers migrating with the seasons.
While Tianjia Network avoids relocation thanks to stable agreements with local hydropower stations, larger players like Hao Bitcoin (operating nearly 50,000 miners) traditionally move thousands of machines across provinces annually.
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Yet migration isn’t without risk. Transporting sensitive hardware through steep, landslide-prone mountain roads during spring rains poses real dangers. One wrong turn or sudden mudslide could wipe out millions in equipment.
From Outsiders to Crypto Enthusiasts
The arrival of mining farms has subtly reshaped local communities.
Residents who once had no concept of blockchain now follow Bitcoin price movements and central bank regulations closely. Some have even set up small home miners — one local reported earning about ¥2 daily from a single unit.
Crypto meetups and mining conferences have sprung up in Chengdu, drawing attendees from government investment agencies to small hydropower owners. A grassroots industry ecosystem is forming.
BTC123 marketing director Cui Demin recalled early days: “At first, people mined with gaming GPUs at home. But residential electricity was too expensive — you’d spend more on power than you’d earn in Bitcoin.”
Now, industrial-scale farms dominate. Over 70% of global Bitcoin hash rate historically came from China, with Sichuan playing a pivotal role during wet seasons.
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Frequently Asked Questions
Q: Why do Bitcoin miners choose Sichuan?
A: Sichuan offers extremely low electricity costs during the rainy season due to surplus hydroelectric power, making it ideal for energy-intensive mining operations.
Q: Do Bitcoin mining farms operate year-round in Sichuan?
A: Most do not. Due to seasonal water fluctuations, many miners relocate to northern regions powered by coal during winter months when hydropower is limited.
Q: How much Bitcoin can a large mining farm produce daily?
A: A facility with 1,500 advanced ASIC miners can generate approximately 8–12 Bitcoins per day, depending on network difficulty and hardware efficiency.
Q: Is Bitcoin mining still profitable in China?
A: While regulatory changes have affected operations post-2021, during periods of cheap energy (like Sichuan’s wet season), mining remains economically viable for well-optimized farms.
Q: What impact does mining have on local communities?
A: It brings technological awareness and economic opportunities. Locals gain exposure to cryptocurrency trends and sometimes participate directly through small-scale mining or related services.
Q: How noisy are Bitcoin mining farms?
A: Extremely loud — often reaching 90–95 decibels, similar to a motorcycle engine. That’s why remote locations like mountainous areas are preferred.
The Future of Decentralized Mining
Even as global regulations evolve and mining shifts toward greener practices, regions like Sichuan highlight how geography and energy infrastructure shape the digital economy.
While large-scale operations may fluctuate with policy and market conditions, the underlying principle remains: mining follows cheap, abundant energy.
And for now, in the misty mountains of southern Sichuan, thousands of machines continue their silent race through cryptographic space — turning flowing water into digital wealth.
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