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Amanda Lee

Josh Ye

At the Golden Arcade at Sham Shui Po, a new product is creating a stir among the community of geeks, gamers and offbeat collectors that call this jam-packed shopping centre in Kowloon their haven.
A banner that reads “Mining Specialist” stands out from among all the stores selling X-Box games, comic books, action hero figurines and video game consoles.
Will a bite-size nibble be the best approach to get a taste of a cryptocurrency?
Roy Chen sells computer hardware specially configured for the complex calculations required to mine bitcoin and other forms of cryptocurrencies, having made the switch from selling everyday laptops and personal computers a year ago.
Cryptocurrency mining “became trendy again since 2016, with many people getting back into it,” Chen said in an interview. “So we began selling bitcoin equipment as a result.”

The entry-level price of a computer capable of mining cryptocurrencies starts at HK$25,000 (US$3,195), which is up 25 per cent from just two months ago, Chen said. The price increase tracks the astonishing surge in the price of bitcoin, the most popular of more than three dozen types of cryptocurrency, from less than US$5,000 each at the end of September to US$18,674 by mid-December.
Demand for graphic processing units (GPUs), the most important components for bitcoin miners, has gone “mad”, following the surge of bitcoin prices, which took off in August after China’s central bank started cracking down on the digital currency.




Bestsellers such as Nvidia’s GeForce GTX 1070 and 1080, as well as RX480 and RX580 made by Radeon Technologies Group, formerly known as AMD Vision, are sold out and currently out of stock in Hong Kong.
It’s a “good problem to have,” Chen said, because his sales revenue from peddling bitcoin equipment has doubled compared to selling run-of-the-mill laptops or computers.
Why does it take so long and cost so much to trade bitcoin?

Nearby, the price of professional bitcoin mining machines such as Bitmain Technologies’ AntMiner S9 model have almost tripled to HK$35,000 from HK$13,000, according to Cheap Monster’s co-founder Jacky Young. Bitmain is a Beijing-based semiconductor manufacturer and designer of ASIC chips used for bitcoin mining and artificial intelligence, founded in 2013.
“Even if you are willing to pay, it is still very difficult to find a machine that’s available,” he said. “If you place an order at the original price, there’s no promise you’ll get one, even months later.”


In Beijing, the AntMiner S9 costs a little more, at 31,600 yuan (US$4,900), according to the BTCfans.com website. The computer can mine 0.0018 bitcoin in a day, roughly equivalent to HK$173 at current bitcoin prices. To mine a single bitcoin would require running the computer round-the-clock for 556 days.

What would that entail in electricity bills? An AntMiner S9 consumes 33 kilowatt-hours of electricity every day, so running it for a month continuously would require 1,000 kWh of power. A computer like this working from home would incur about HK$1,600 in monthly electricity bill.
China’s electricity tariff, at a third of Hong Kong’s charges for residential usage, is among the lowest in the world, varying from 0.4783 yuan per kWh for residential use to 0.7525 yuan per kWh for commercial use in Beijing, according to OVO Energy’s study.
The cost is even cheaper in outlying cities. That is why the mainland is home to the world’s biggest cryptocurrency mines, with the equivalent of a combined 111 megawatts of computational power being put to work, according to the University of Cambridge.

While a back-of-the-napkin calculation suggests that the initial cost of buying a cryptocurrency mining computer can be recovered in about 200 days if a coin is successfully mined, the reality is far from the maths. That is because the computational difficulty in bitcoin mining increases by about 7 per cent every 13 days on average.
So it now takes about 900 days of round-the-clock computing in rural China to recover the cost of owning a single AntMiner S9, according to BTCfans.com.
Infographics: What’s in your wallet? An illustrated guide to bitcoin
That is all well and good if the price of cryptocurrencies hold steady, or soars. What if the price collapses? It has happened before, when bitcoin’s price dropped 11 per cent on December 22, fluctuating by as much as 30 per cent in a single day, according to composite prices compiled by Bloomberg.
It’s not worth it if you are an ordinary person. If you are a computer geek, then you will be spending HK$25,000 on a computer anyway
Joseph Wang
One strategy may be to not put the trust in a single cryptocurrency, said Harry Wong Hon Kit, who spent HK$25,000 on a computer to mine Ethereum, another emerging cryptocurrency. Wong said he has earned a “few thousand dollars” in the last month from his mining.
“It’s not much, but I’ll stick with it, and am looking at alternatives,” he said.
Rather than investing in all-in-one mining machines like the AntMiner S9, Joseph Wang assembled his own computers that can mine Ethereum, whose value has soared 13,000 per cent in a year, since its 2015 release.
Wang, a cryptocurrency investor and adviser in Hong Kong, spent HK$9,000 on three RX580 graphic processors and HK$8,000 on other components. If the price of Ethereum rises by 10 times, mining it gets a return of about US$20 a day, Wang estimated.
“It’s not worth it if you are an ordinary person,” he said. “If you are a computer geek, then you will be spending HK$25,000 on a computer anyway.”


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It takes 556 days of computing and a hefty electricity bill to mine a single bitcoin. Is it worth it?

In this December 6, 2013 photo, a staff member checks a bitcoin mining computer at Landminers in Chongqing. China is home to the world’s largest cryptocurrency mines, eager to make use of the country’s abundantly cheap electricity charges. Photo: Chinatopix

graphic for online

CANADA 18 megawatts US 27 megawatts VENEZUELA ICELAND 5 megawatts SWEDEN 10 megawatts ESTONIA 2 megawatts CHINA 111 megawatts CHINA GEORGIA THAILAND 60 megawatts Hong Kong POLAND 1,000km Xinjiang Liaoning Anhui Tibet Sichuan Jiangsu Yunnan Guizhou Heilongjiang Inner Mongolia Global cryptocurrency mining sites Reported mining facilities Estimates not available Source: University of Cambridge SCMP 10 megawatts or less 11-50 megawatts >50 megawatts Low-cost electricity Fast internet connection Low-temperature zones Low-cost electricity/ Low-temperature zones Low-cost electricity/ Fast internet connection Low-temperature zones/ Fast internet connection Low-cost electricity/ Low-temperature zones/ Fast internet connection

Bitcoin mining equipment on sales in a shop at Golden Computer Arcade in Sham Shui Po. 20DEC17 SCMP / Xiaomei Chen

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A golden symbolic bitcoin is pictured in Düsseldorf, Germany. The virtual currency has dropped from a record high it hit less than a week ago. The cryptocurrency, which allows anonymous transactions unrestricted by global borders, is popular with tech heads, people suspicious of government and those seeking to launder money. Photo: EPA-EFE

epa06401640 From L-R Paolo Barrai, Co-founder of Cryptolab Inv Advisory, Bitmax a Swiss regulated exchange, and advisor to the Canton of Ticino in Switzerland on the enactment of the law on paying taxes by bitcoin, Andrey Yudin, co-founder of CryptoBazar Fund, unidentified moderator, Oleg Ivanov - businessman, investor, founder of CryptoBazar Fund and Melissa Yoon, former employee MAS - Monetary Authority of Singapore attend a press conference 'World Trends and Forecasts of Crypto-Currency in 2018' in Moscow, Russia, 21 December 2017. The conference addresses topics such as how to prepare, where to invest, where to start and with which partners when investing in crypto-currencies. The conference also presents important international projects. EPA-EFE/YURI KOCHETKOV EPA-EFE/YURI KOCHETKOV

epa06402506 A staff member hands out brochures outside Ducatus cafe, which claims to be Singapore's first cashless cafe that accepts cryptocurrencies such as Bitcoin, in the Central Business District of Singapore, 22 December 2017. Ducatus cafe opens officially on 21 December 2017, as the city state's first cashless cafe that accepts cryptocurrencies such as Bitcoin, its own virtual currency called Ducatus and other cashless payments. EPA-EFE/HOW HWEE YOUNG

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Bitcoin bubble embodies our bipolar year of optimism and doubt

Bitcoin trader Yoshinori Kobayashi speaks in a media interview in Tokyo on December 12. The virtual currency Bitcoin has seen an extraordinary rise throughout 2017 but has left many convinced that it is a bubble waiting to pop. Photo: Reuters

A view of Ducatus cafe, the first cashless cafe that accepts cryptocurrencies such as Bitcoin, on their opening day in Singapore December 21, 2017. REUTERS/Edgar Su

Bloomberg Best of the Year 2017: Eugene Mutai, a bitcoin 'miner' and software developer, poses for a photograph with cryptocurrency 'mining' machines at his home in Nairobi, Kenya, on Saturday, Sept. 9, 2017. Photographer: Luis Tato/Bloomberg

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CBOE website goes down briefly at the start of trade in the virtual currency futures contract

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Bitcoin rebounds above US$14,000 as investors seem to find a bottom ahead of 2018

After a roller coaster close to 2017, bitcoin finally seems to have found a bottom, and has now rebounded above $14,000. Photo: REUTERS

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The prices of crypto mining computers have risen with soaring bitcoin prices, prompting some enthusiasts to mine for Ethereum and other alternatives


The prices of crypto mining computers have risen with soaring bitcoin prices, prompting some enthusiasts to mine for Ethereum and other alternatives.


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