Workers are transferring mining rigs to another farm.
Kirk is mining for the digital currency in the Chinese province of Sichuan, hoping that he won't be caught by the authorities.
Kirk, who asked only to be identified by his nickname to ensure his safety, is getting creative to evade detection, like other other miners who have gone underground since Beijing cracked down on the industry earlier this year.
Kirk spread his mining equipment across multiple sites so that no one operation stood out on the electrical grid. He has gone behind the meter to draw electricity from small, local power sources that are not connected to the larger grid. He has taken steps to hide his digital footprint.
The last six months have really raised the stakes for Kirk, who tells CNBC that he is used to getting around things when it comes to running a business in China.
Kirk said that they don't know what the government will do to wipe them out.
The mine is in China.
Kirk is not the only one.
As much as 20% of all the world's miners remain in China, multiple sources tell CNBC, despite Beijing banning mining in September and again in November. It is more than Cambridge University's official estimate of China's share in the global market, which is at zero.
According to data from Chinese cybersecurity company, the underground mining appears to be alive and well in China. The research group estimated that there are 109,000 active cript mining addresses in China on a daily basis. Most of the addresses are in the provinces of Guangdong, Jiangsu, and Zhejiang.
Many miners in China weren't sure if Beijing was serious about the ban.
China has lashed out against digital currencies many times, but each time the sting wore off and the rules became less strict. The country announced this spring that it would be cracking down on mining in criptocurrency, which coincides with the 100th anniversary of the founding of the Chinese Communist Party. Smaller-scale operators who didn't have the resources or the connections to migrate abroad figured a lot of the talk by the government was bravado, so they powered down, laid low for a few weeks, and then came back online, taking a few extra precautions.
There are a few reasons why this is different.
China is short on power, which is crucial to the process of mining bitcoin. The country has had its worst energy shortage in a decade.
Beijing has made it clear that it wants to achieve carbon neutrality by 2060, but that it can't do that if cryptocurrencies are not allowed. In November, the government spokesman slammed the practice of mining and promised harsher measures.
A technician inspects machines at a mining facility in Ordos, Inner Mongolia, China.
There is competition from the digital yuan. The country is testing a digital currency that could give the government more power to track spending. Making it harder to transact in rival cryptocurrencies could be part of a larger plan to ensure adoption of this new central bank digital currency, according to Fred Thiel, CEO of Marathon Digital.
The Chinese government is doing everything they can to prevent the use of cryptocurrencies in the country. To ensure the adoption of China's central bank digital currency, and to ensure that financial activities are able to see all economic activity.
Whatever the reason, the government is hostile towards cryptocurrencies.
In the provinces of Zhejiang, Jiangxi, Hebei, and Inner Mongolia, the government has taken varying degrees of action, such as asking local officials to run their own self-compliance checks, screening internet protocol addresses for illegal mining activity, and arresting and expelling them.
Electricity prices can be less than the going rate at some research institutions, community centers and schools. The government promised to raise energy prices for institutions that use subsidized power.
State-owned businesses are being investigated for taking part in the trade.
Dozens of state-owned entities in the eastern province of Zhejiang are using public resources to mine for twelve cryptocurrencies, according to the country's anti-corruption watchdog. The 21 people who worked at state-owned enterprises or Communist Party agencies were the ones who were punished.
State-owned entities have been involved in mining schemes.
The communication watchdog for the province found that 21% of the addresses that were participating in the mining of cryptocurrencies were from state-owned institutions.
Kirk has found ways to survive undetected despite the government's efforts to weed out all the cryptographers.
The Bitmain mining facility in Ordos, Inner Mongolia, China, has technicians repairing its machines.
Most of the industry went dark when China began taking down mining companies.
CNBC spoke to multiple participants in China's illegal mining market, some of whom have spent time on the ground in China and others who have direct knowledge of how these operations continue to exist under the ever-increasing scrutiny of regulators.
The biggest players in the business got out quickly because of their connections overseas. Many people moved their teams to countries with low-cost power and available hosting capacity.
Some heavy hitters left their gear in Asia and headed to new homes abroad, instead placing orders for the latest machines to be delivered to their new homes abroad.
Smaller miners with limited disposable income and fewer international connections found it hard to relocate due to the trade war between China and the U.S.
Selling gear wasn't all that effective as an off-ramp, as the flood of inventory into the resale market tanked the going rate for mining rigs.
One expert told CNBC that medium-sized miners were completely screwed in this year's raid. They couldn't sell their equipment to make up for their losses because their electrical footprint is easy to pick out.
It has been easier to fly under the radar for the smaller mines. The authorities were less likely to notice that some mining operations were divided into multiple farms. Some piggybacked off small, local power sources, like tiny dams in rural areas that are not connected to the main electric grid.
One miner who has spent years minting scrypt all over the world, including in China, said that mining is no longer a big business. The industry has turned into more of a piecemeal operation, with a couple thousand miners here, a couple thousand miners there.
It is more of a band-aid to make money to help move the miners out of the country.
Kirk has over one thousand mining rigs that are powered by grid electricity and another five thousand units that are tethered to hydropower and are located in the south of China.
Kirk tells CNBC that he has spread the miners out across the country in order to avoid detection.
They are everywhere. Kirk said that he has plugged mining gear into industrial power lines wherever his friends will let him grab a bit of extra power.
Marshall Long, who has been mining for cryptocurrencies for over a decade in places like Sweden and China, says that this is now a common practice.
Long said that his friends who are mining in China are fragmented because they are drawing from the grid. They usually do it in chunks of 20megawatts or smaller, so they are like home-buying their way to a small-scale mine.
Once the build-out is complete, America's largest mine will have a total power capacity of 750 megawatts.
Kirk says that grid pricing is really expensive. It is easier to operate on the side of the road when using off-grid power.
The wet season in China runs from May into the late fall, and monsoon-level rainfall means an abundance of hydropower, which is more easily captured from behind the meter.
Beijing banned the use of cryptocurrencies as miners were already heading to two of the main provinces for mining. Compared to the coal plants in the northern provinces of Xinjiang and Inner Mongolia, which were once bastions of the crypto mining network, these dams are less trackable and harder to identify.
Kevin Zhang of the digital currency company Foundry said that there is a lot of miners attached to hundreds upon thousands of hydro dams in the area.
Most of Kirk's rigs run on hydropower. There are two sites in Sichuan. The first is 12 megawatts and the second is eight. In China, a mine that is above one megawatt at a single location is now considered large, according to Kirk.
Before the ban, it was standard practice for miners to rent their own transformers and substations in order to provide power to mining sites directly from power plants. The power from a substation can be converted to a lower voltage by transformer and used to power miners.
Kirk paid a one-time fee to lease an entire power plant that operates off the grid at one of his locations, which lowers his chance of being found out.
Kirk has taken steps to hide his activity. He says that China Telecom, one of the country's biggest telecommunications companies, is a mining police in China by looking out for suspicious electricity usage.
Once identified, the chain of command becomes a game of telephone, with China Telecom referring the activity to the central government, who then relays the information to the specific province or town where the alleged mining is happening. Kirk said that the local government called the power plant to investigate the allegation.
There is a hydropower plant on the Yalong River.
Kirk says he was lucky because the power plant owner liked him. The power plant's owner covered Kirk when the government contacted them about suspicious activity. Kirk shut off the mine for a few days and took some steps to mask his network traffic.
Keeping miners off the radar is dependent on IT hygiene.
A virtual private network is used by miners to hide their geographic digital footprint. Beijing has cracked down on the use of virtual private networks as a tool to evade government censorship.
Most underground miners are turning to mining pools as another way to hide their tracks, joining cryptocurrencies miners from around the planet to combine their computing power. Multiple sources tell CNBC that some foreign mining pools are still signing up Chinese miners despite the suspension of services inside China.
Kirk explained that they hide their hashrate. The collective computing power of all miners in the network is described by the industry term shirrate.
When a block of transactions is added to the digital ledger of transactions known as the block, the pool that won it signs its name to the block. Multiple sources tell CNBC that pools no longer sign their name when Chinese miners solve a block because of a departure from past protocol.
Kirk said that a pool doesn't have to reveal any data. You are telling the world that my revenue is only half of what I have. You don't brag about it.
This could help explain why China's share of the global market went to zero in a matter of hours.
Many underground operations have been helped by pools, even though they are quiet about working with Chinese miners.
Some larger pools still care. Kirk said that they provide a lot of technical support to help you if your own people don't have the technical ability to set it up.
Many foreign pools provide them with technology that hides what they are doing, according to Long.
It looks like ordinary web traffic because they are encrypting their packets as they leave the data center.
Kirk says that one pool that he works with helped him set up a server that made his mine look like it had fewer connections. In a rural area like Sichuan, when a single internet address has thousands of connection points, it looks suspicious to authorities. Kirk says pools help miners get around that.
Kirk said that after they do their magic, you will only see five machines, which will not look suspicious.
There are mining equipment for sale in Sham Shui Po.
China's underground miners have a new problem: The wet season is over.
In the past, miners used to pack up their gear and go to either Inner Mongolia or Xinjiang to get electricity from coal-powered plants. The regions are now closed to miners.
As hydro dams dry up, China will lose its share of the global market in the virtual currency. A lot of miners will have to capitulate.
When you have to re-route your miners over and over again, it is very painful, so he thinks that many will look to North America to sign long-term agreements. He said that it was a more stable framework and wouldn't change on you.
Kirk is considering that option.
Kirk is in a bit of a holding pattern until he gets a deal with an American host. He is selling some of his S19 series AntminerASICs, but he is not done with them yet.
If you liquidate your stake, these machines will grant you instant access to the U.S. dollars and the virtual currency of your choice. That kind of insurance policy is very valuable in a country with very tight capital controls.
It is a big reason why a lot of miners haven't capitulated and sold their equipment, because it is access to capital overseas once they get it plugged in.
