Inside South London’s bitcoin mining farm where the cryptocurrency is born

Hardware inside a London bitcoin mining farmDX

What does a bitcoin farm look like? Inside one of London’s cryptocurrency mines

The cryptocurrency took 2017 by storm and its meteoric rise in value saw it peak at £14,149 ($19,343) on December 16.

And while it was once possible for individuals to use their home computers to “mine” the virtual coins, the technology has evolved to the point where would-be miners now need to invest hundreds of thousands of pounds into professional-grade equipment to make the endeavour worthwhile. 

Vlad Poliakovsky is one of the partners in Picatrix Consulting, a company which sets up and operates modern bitcoin farms, and he offered Express.co.uk a unique insight into one of his UK operations based in East Croydon.

While traditional agriculture requires acres of land, irrigation and constant upkeep, modern bitcoin mining requires huge amounts of electricity and industrial level cooling systems.

We think that bitcoin is a harbinger of a massive change

Vlad Poliakovsky

At it most basic level, mining bitcoin involves computers solving complex mathematical equations in the hope of ‘discovering’ a coin. 

The first machine to solve the equation receives the coin as a reward, which as of 2.35GMT on January 12, is worth £10,169 ($13,898), according to CoinDesk

When the digital currency first appeared in 2009, the equations were simple to solve so new coins were plentiful. 

However because of the way the system is designed, only a finite number can ever exist.

Anminer bitcoin mining hardwareDX

The equipment produces huge amounts of heat and noise while it works to mine bitcoins

And as more coins are mined, the equations have become increasingly complex, requiring more and more computing power. 

Today, stacks of high-tech equipment are needed to churn through equations day and night if miners hope to run a profitable operation.

But despite the hefty up-front costs and eye-watering electricity bills, it can be extremely lucrative.

Mr Poliakovsky acknowledged investing the large amounts required to run a bitcoin mining farm was a risky business.

Bitcoin mining hardware in LondonDX

Bitcoin mining hardware requires huge amount of electricity to churn through complex maths equations

But he said the operation has the potential to quickly rake in large profits – far above what the owner of a traditional business might expect to earn.

He told Express.co.uk: “It is a gamble, but it’s a high margin gamble.

“The costs can be highly volatile and it can be risky but typically the margin is very high.

“The break even period for medium or large mining farm is between three and four months.

“Compare this to a small business, such as a shop or a cafe, which would usually it could take up to 14 months to break even.”

But despite the potential profits involved, he warned against people rushing to invest their savings. 

He added: “We don’t really recommend normal people without financial backing to get involved in this.”

The businessman is currently selling a bitcoin mine in an East Croydon datacenter with an asking price of £500,000.

Rows of Anminer bitcoin hardwareDX

The bitcoin mining kit is arranged in rows in a large datacenter

The farm is kitted out with 63 “Anminer” units – specialist computing equipment built in China which is designed specifically to mine bitcoins. 

But in addition to requiring huge amounts of electricity, the kit also produces a staggering amount of heat, which needs to be safely removed using high-tech cooling systems.

And the noise of all 63 miners running at once is so loud it is equivalent to a jet plane roaring overhead. 

Bitcoin has seen a drop in value in recent weeks as a series of governments impose restrictions on their trade and rival cryptocurrencies, such as ripple and Ethereum, gain popularity.

But Mr Poliakovsky predicted that despite the wobble, bitcoin is here to stay, and predicted its value would eventually rise up to $40,000.

He said: “I’m absolutely sure it will recover over time.

“We think that bitcoin is a harbinger of a massive change. 

“The way we make transactions will change drastically over the next 20 or 30 years.”

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