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Why is is Bitcoin mining mainly happening in China, but not other compute bound tasks? How about machine learning. Why aren't the leading data centers for ML b

Why is is Bitcoin mining mainly happening in China, but not other compute bound tasks? How about machine learning. Why aren't the leading data centers for ML based in China? Or are they? And on the energy front - if fossil fuels are the best energy source for calculating hashes, why not for other types of number crunching? Can boycotting one type of calculations really keep the fossil fuels under the ground? If they are useful to power computations - won't they be used for some kind of computations anyhow?

Isinlor 5y ago
Data centers mostly serve customers and customers care about reliability and latency. Distance and Great Firewall of China do not help with any of that. Also, because moving data to China is a legal nightmare in EU and public relations nightmare in the whole west.
qeternity 5y ago
Because there is tremendous risk of having data located in China. This is not the case with Bitcoin. If you put your SOTA AI/ML project there, your IP will be stolen, guaranteed. If you put your Bitcoin mining there, your only risk is the hardware.
- ArtTimeInvestor 5y ago
  The Bitcoin mining farms in China are not rented out to western customers. They do not sell the raw processing power. They sell the finished product: mined blocks. They could do the same for ML. Sell the trained models.
  - throwaway-8c93 5y ago
    The trained model is a guarded treasure. There's a reason why very few ML papers publish their trained models; or Deepmind/OpenAI never releasing the resulting models - it's expensive to train the network, but cheap to use it afterwards. You don't want anyone unauthorized to get their hands on it.
    - ArtTimeInvestor 5y ago
      Well, somehow the models must be monetized. Either by giving them to the customer (Like Tesla will put them into cars) or by letting the customer interact with them via the internet (SaaS). Either way - if the production of the models is most efficient in China, then we should see them being made in China.
CorrectHorseBat 5y ago
Probably because it's a good way to funnel money out of China
throwaway-8c93 5y ago
There are several reasons it's mostly a China-operation. Interestingly, it's a textbook example of deficiencies being the competitive advantage. #1 - China's electricity grid is not very efficient at distributing, which leads to some areas with constant surpluses, directly translating into extremely low electricity prices in those areas #2 - almost all computer hardware is manufactured in East Asia. Chinese miners don't buy their hardware on the open market, they snatch underhanded special deals with the manufacturers who're then deeply sorry about their "unexpected manufacturing shortfalls" #3 - Crypto is essentially banned in China for private citizens. Chinese Communist Party is actually quite happy about the mining though - when you zoom out a bit, it's just a money pipe from the rest of the world (mainly US) to China. It also funds bootstrapping of their silicon industry #4 - crypto in general benefits from weak rule of law. Try running a crypto mining operation in France - the tax collectors will be knocking on your door after the first mined block. Corruption and nepotism is absolutely endemic in China - "sharing" a bit of the mining profits with the local officials has a high chance of skirting the rest of the tax burden
- ArtTimeInvestor 5y ago
  These 4 points would apply to any type of high latency / low security computation though. Is Bitcoin mining the only type of such computation for which there is a large demand?

Isinlor 5y ago

Data centers mostly serve customers and customers care about reliability and latency. Distance and Great Firewall of China do not help with any of that. Also, because moving data to China is a legal nightmare in EU and public relations nightmare in the whole west.

qeternity 5y ago

Because there is tremendous risk of having data located in China. This is not the case with Bitcoin. If you put your SOTA AI/ML project there, your IP will be stolen, guaranteed. If you put your Bitcoin mining there, your only risk is the hardware.

ArtTimeInvestor 5y ago
The Bitcoin mining farms in China are not rented out to western customers. They do not sell the raw processing power. They sell the finished product: mined blocks. They could do the same for ML. Sell the trained models.
- throwaway-8c93 5y ago
  The trained model is a guarded treasure. There's a reason why very few ML papers publish their trained models; or Deepmind/OpenAI never releasing the resulting models - it's expensive to train the network, but cheap to use it afterwards. You don't want anyone unauthorized to get their hands on it.
  - ArtTimeInvestor 5y ago
    Well, somehow the models must be monetized. Either by giving them to the customer (Like Tesla will put them into cars) or by letting the customer interact with them via the internet (SaaS). Either way - if the production of the models is most efficient in China, then we should see them being made in China.

CorrectHorseBat 5y ago

Probably because it's a good way to funnel money out of China

throwaway-8c93 5y ago

There are several reasons it's mostly a China-operation. Interestingly, it's a textbook example of deficiencies being the competitive advantage. #1 - China's electricity grid is not very efficient at distributing, which leads to some areas with constant surpluses, directly translating into extremely low electricity prices in those areas #2 - almost all computer hardware is manufactured in East Asia. Chinese miners don't buy their hardware on the open market, they snatch underhanded special deals with the manufacturers who're then deeply sorry about their "unexpected manufacturing shortfalls" #3 - Crypto is essentially banned in China for private citizens. Chinese Communist Party is actually quite happy about the mining though - when you zoom out a bit, it's just a money pipe from the rest of the world (mainly US) to China. It also funds bootstrapping of their silicon industry #4 - crypto in general benefits from weak rule of law. Try running a crypto mining operation in France - the tax collectors will be knocking on your door after the first mined block. Corruption and nepotism is absolutely endemic in China - "sharing" a bit of the mining profits with the local officials has a high chance of skirting the rest of the tax burden

ArtTimeInvestor 5y ago
These 4 points would apply to any type of high latency / low security computation though. Is Bitcoin mining the only type of such computation for which there is a large demand?