If you are contemplating getting involved in Bitcoin mining using a CPU or a GPU or even an ASIC, you need to see this report on how far it has gone. A secret facility mines Bitcoin using racks of liquid cooled hardware.

Xiaogang Cao just happened to be in Hong Kong and what do you do when you find yourself in Hong Kong?

Obvious, visit a secret Bitcoin mining operation. If you think that Bitcoin mining is something you can do with a spare GPU, or even a rack of spare GPUs, then it's time to rethink. The day of the dedicated hash computing hardware is with us and people pay thousands of dollars for  hardware that does nothing but mine Bitcoin. However, it seems that it is time to upgrade your expectations once again because there are mining operations that use racks of liquid cooled ASIC  devices to do the job. 

Source: Xiaogang Cao

The ASICMINER construction was started in August 2013 and its hash rate started to ramp up in October. The whole unit is installed on the roof of the company that makes the ASIC chips. The ASIC cards are fitted to racks inside a glass tank containing a fire retardant liquid normally used in extinguishers. The liquid is cooled and pumped around using Chinese hardware. Each tank has 92 blades with 200cc of liquid providing 4kw of cooling.

Currently the farm is not fully populated and some of the racks are empty. The construction of the cooling system looks more like a piece of sci-fi set or perhaps plumbing-based modern art:

Source: Xiaogang Cao

How much of an impact on the difficulty of Bitcoin mining such super miners will have is difficult to say. The Bitcoin algorithm adjusts the difficulty every 2016 blocks to keep the rate at about 10 minutes to solve a block. It the hardware improves then the difficulty goes up to keep the rate constant. So introducing super hash farms, such as this one, will make the problem harder and make it increasingly difficult for less well equipped miners to succeed.

Of course, this is another potential mechanism whereby the Bitcoin algorithm could become compromised. A single mining faculty such as this could end up in control of most of the block validations in the world, with the resulting loss of decentralised processing that Bitcoin depends on. 

The bottom line, however, is that if you have been tempted by the new high value of over $1000 per Bitcoin to get involved in mining - don't bother unless you can afford something big, really big.

Currently the reward for mining a block is more than $25,000 so you can see that it is worth the investment - but only if you can win, keep winning and the value of Bitcoin holds up. 

The author of the original report Xiaogang Cao runs a Chinese crowdfunding website: http://dreamchina.com/projects/59666 which is a charity helping children.

He states" If you would like to donate to a good cause then send Bitcoin  to 1AftZ6QoWcdmaNWZsJyT9GVVdRAT5mVtTB you will help more than 400 children. Any size of donate is welcome."