Cryptocurrency has been a hot topic for much of 2017; Bitcoin specifically has been the pinnacle of much debate in the cyberworld due to its volatile fluctuations. With a peak value of nearly $20,000 for one single coin, it stands to reason why the public is so enamored with the cryptocurrency. However, simply investing in the coin isn’t the only thing people are talking about.
Because cryptocurrencies are not actually tangible, or rather a physical thing, there must be a way for the currency to be created and circulated. To put this into perspective, consider how the Federal Reserve and United States Government work together to produce and disperse currency- Bitcoin and mining are a very loose translation of that. Mining involves the use of high performance hardware that can solve algorithms quickly and with absolute accuracy. Anybody with access to the internet and the right hardware can become a “miner” however, the process is time consuming and rather difficult.
The Shift Towards Bitcoin in Data Centers
Due to the increase of data miners and the high demand for Bitcoin, to effectively mine the coin, you need to use powerful ASCI machines. These machines draw a high amount of power and are costly to maintain. It has become apparent to a growing number of people (including many crypto-focused companies) that in order to mine cryptocurrencies at a large scale, moving the mining efforts out of their homes, and into large data centers will be the most profitable.
One of the factors in the shift towards data center mining is electricity cost. Powering the machines needed to be a successful miner consumes a substantial amount of electricity. Running that kind of power out of a home can drastically reduce net profit due to high power bills, and let’s not forget about cost and space. When running a mining business from home, you cannot effectively store large amounts of equipment, which means you can only purchase a small amount of equipment. Buying mining equipment in small quantities is vastly more expensive than buying in bulk. There is also the issue of hardware management, technical know-how, and infrastructure security. When you mine via data center, these issues have been considered and addressed.
Modern data centers take advantage of renewable energy. Those that are constructed in very sunny areas, for example, can be powered largely by solar panels. Those in windy environments use wind energy, and there are some centers that use hydro-electric power. All of these options require an up-front investment, but beyond that, power is inexpensive to produce, which will pay off over time. Mining crypto generates huge amounts of heat, and it can be very difficult to keep a smaller room, or even a basement, cold enough to avoid damaging the hardware. Data centers, on the other hand, are built with custom cooling solutions in mind.
Many people in the Bitcoin community are unhappy that mining has moved from something that anybody could do on a standard PC to task that requires significant resources and technical know-how – in steps Cloud mining. Cloud mining involves renting computational power from cloud mining services and remote data centers. This removes the need to purchase and maintain hardware, which is ideal for an at home miner
While mining is still dominated by large operations, cloud mining has created a viable alternative to those wishing to mine independently. To be a cloud miner, you need only an e-wallet and an internet connection. While it may be impossible to predict the future of Bitcoin and mining alike, it is predicted to be dependent on data centers for many years to come.