A fire at a major bitcoin mining farm in China has destroyed millions of dollars worth of equipment, according to reports.

The incident took place on Monday at a data centre operated by Innosilicon, according to bitcoin mining expert Marshall Long, who posted pictures of the fire on social media.

Dovey Wan, a founding partner at cryptocurrency firm Primitive Ventures, estimated that the total cost of the damage was around $10 million (£8.1m).

Other mining experts speculated that the loss to the bitcoin mining network may have helped contribute to bitcoin's recent price resurgence, which has seen its value rise by more than $500 over the last 24 hours.

Innosilicon has not confirmed that the fire took place at its facilities and did not respond to a request for comment from The Independent.

Bitcoin's volatile history in pictures Show all 8 1 /8 Bitcoin's volatile history in pictures Bitcoin's volatile history in pictures Satoshi Nakamoto creates the first bitcoin block in 2009 On 3 January, 2009, the genesis block of bitcoin appeared. It came less than a year after the pseudonymous creator Satoshi Nakamoto detailed the cryptocurrency in a paper titled 'Bitcoin: A peer-to-Peer Electronic Cash System' Reuters Bitcoin's volatile history in pictures Bitcoin is used as a currency for the first time On 22 May, 2010, the first ever real-world bitcoin transaction took place. Lazlo Hanyecz bought two pizzas for 10,000 bitcoins – the equivalent of $90 million at today's prices Lazlo Hanyecz Bitcoin's volatile history in pictures Silk Road opens for business Bitcoin soon gained notoriety for its use on the dark web. The Silk Road marketplace, established in 2011, was the first of hundreds of sites to offer illegal drugs and services in exchange for bitcoin Bitcoin's volatile history in pictures The first bitcoin ATM appears On 29 October, 2013, the first ever bitcoin ATM was installed in a coffee shop in Vancouver, Canada. The machine allowed people to exchange bitcoins for cash REUTERS/Dimitris Michalakis Bitcoin's volatile history in pictures The fall of MtGox The world's biggest bitcoin exchange, MtGox, filed for bankruptcy in February 2014 after losing almost 750,000 of its customers bitcoins. At the time, this was around 7 per cent of all bitcoins and the market inevitably crashed Getty Images Bitcoin's volatile history in pictures Would the real Satoshi Nakamoto please stand up In 2015, Australian police raided the home of Craig Wright after the entrepreneur claimed he was Satoshi Nakamoto. He later rescinded the claim Getty Images Bitcoin's volatile history in pictures Bitcoin's big split On 1 August, 2017, an unresolvable dispute within the bitcoin community saw the network split. The fork of bitcoin's underlying blockchain technology spawned a new cryptocurrency: Bitcoin cash REUTERS Bitcoin's volatile history in pictures Bitcoin's price sky rockets Towards the end of 2017, the price of bitcoin surged to almost $20,000. This represented a 1,300 per cent increase from its price at the start of the year Reuters

Bitcoin mining is the process of generating new units of the cryptocurrency by solving complex mathematical problems. It requires vast amounts of computer processing power and is therefore extremely energy intensive.

Recent estimates suggest that the mining network that supports bitcoin uses as much energy as the entire nation of Ireland and some scientists claim it has put the world on the brink of an environmental disaster.

A 2018 study published in Nature Climate Change found that the carbon emissions produced by the vast energy demands of bitcoin could push global warming above 2C in just two decades.

While clean energy mining solutions do exist, such as in Iceland and Norway, the majority of operations are based in China, where coal-generated electricity is cheap.

China claims to be cracking down on unlicensed cryptocurrency mining operations, however it is not clear what measures are being taken.