Inside the secretive world of a Chinese bitcoin mine

Bitcoin, the world's leading cryptocurrency, has had a roller coaster ride over the past 12 months.

Despite wild fluctuations in the exchange rate, scams galore and the involvement of many a shady character, the process of mining is still a lucrative exercise.

This documentary, produced by Vice, gives a rare glimpse inside a Chinese bitcoin mine. Situated in northeastern Liaoning province, the mine turns over $US1.5 million worth of bitcoin a month.

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What is a cryptocurrency?

A cryptocurrency is a digital medium of exchange that uses encrypted software to operate a market for transactions. That market is overseen by those using the network, based on rules coded in to algorithms. It's a transparent, peer-to-peer operation, similar to the file-sharing protocol BitTorrent which is widely used for the illegal sharing of movies, TV shows and music.

How are cryptocurrencies propagated?

Cryptocurrencies are created, or mined, based on a mathematical formula. In the mining process, computers are tasked to solve complex mathematical problems and rewarded with virtual coinage. Over time, the equations become progressively more difficult to solve, slowing down the supply of new cryptocurrency units.

Can anyone become a miner?

Theoretically it is possible to start mining at home. But as the mathematical challenge becomes harder, more computational grunt is required. For this reason, miners often pool resources to buy access to supercomputers or server farms (networked arrays of smaller computers).

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Inside the secretive world of a Chinese bitcoin mine