There’s more trouble in cryptocurrency land after a “monstrous data facility” that mined Bitcoin in China reportedly burned to the ground recently, supposedly due to “faulty wiring and bad PSUs.”
An omen of what’s to come for the world’s financial system at large, the disaster, which occurred at a company known as Innosilicon, resulted in more than $10 million worth of equipment being destroyed, including advanced mining machines that “dug” Bitcoin out of the digital “ground.”
Horrified by the incident, some Twitter users with local access shared pictures and video of all the damage, which just goes to show that there’s no actual stability or safety when it comes to cryptocurrency.
Unlike gold, a tangible asset that can’t burn, Bitcoin and other cryptos can simply vanish overnight, which is exactly what happened to the Innosilicon facility after unexpectedly catching fire. Bitcoin would also cease to be in the event of a mass grid-down event, which likewise wouldn’t affect gold because it’s an element of the cosmos, and thus isn’t going anywhere no matter what catastrophe occurs.
For more related news about the highly volatile nature of Bitcoin and of trendy cryptocurrencies, be sure to check out BitRaped.com.
According to Chinese sources, the $10 million facility was located in the Inner Mongolia region, and the cause of the fire was poor construction and bad equipment. But the company insists that there wasn’t even a fire at all, and that the whole thing is a wild rumor.
“In the last couple of days, a rumor is circulating about a fire in alleged Innosilicon farm causing ten million dollars miner equipment loss,” reads a grammatically abysmal announcement by the company that was tweeted on Twitter.
“We can say with 100% certainty that the fire was not related to Innosilicon and there has been ZERO Innosilicon property or equipment loss.”
Many observers aren’t buying this, though, especially since the alleged blaze appears to align with a hash rate anomaly that took place at the very same time that the fire is said to have occurred.
“Block 597,273 was mined 119 minutes after its parent,” tweeted a guy by the name of Antoine Le Calvez, revealing a strange occurrence of an inverted 911. “This happened only 10 times in Bitcoin’s history, the last time in May of 2014.”
In laymen’s terms, what Le Calvez is referring to, here, with regards to Bitcoin’s hash rate is the speed at which systems are able to complete various operations in the Bitcoin code. A higher hash rate is preferable when mining because it increases a system’s opportunity to find the next block and receive the reward.
In the case of Innosilicon, the Bitcoin hash rate plunged right around the time when the fire is said to have occurred, which would make sense as Innosilicon’s equipment was allegedly destroyed, or at least took a pretty big hit in terms of fire damage.
“As noted previously, the [hash rate] plunged a record 40% on Sept. 23, in a sudden, unexplainable shock,” notes Zero Hedge. “Since the Sept. 23 [hash rate] drop, Bitcoin has plunged -15% in 216 hours.”
Bitcoin is currently suffering in other areas as well, including in China’s Sichuan province where intense and devastating rainstorms are causing mudslides that have forced many local hydropower plants and cryptocurrency miners to cease their operations.
“So a miner goes offline and the price plummets. Wasn’t Bitcoin meant to be stable once all the coins had been mined?” asked one Zero Hedge commenter, making a very good point about the illusion of security surrounding Bitcoin.
“Or is this a glimpse of how the party ends?”
Sources for this article include: