Bitcoin, the peer-to-peer virtual monetary system created in 2008 and followed by other cryptocurrencies, has gained considerable traction over the last couple years. Despite concerns of non-centralization, anonymity, price volatility and future uses, Bloomberg Business Week and The Economist agree that the process of mining is becoming more commercial and professional which relies on extensive infrastructure and hardware that offers the highest efficiency for the process. Does this create a new opportunity for colocation facilities capable of handling the infrastructure demand?
Frontline Data Services, a New York data center with robust infrastructure and hardware knowledge is pulling 8.6 KW per partially filled cabinet where mining gear is active, in comparison to the 3 KW that a typical cabinet in their facility would utilize. Currently the value of the currencies outweighs the costs of the power, which Forbes says is at $15 million dollars worth per day. Without a deterrent from cost, the primary focus for mining cryptocurrency is speed.
In the case of bitcoins, the number available to be mined decreases over time. Not only are the power requirements extensive, the processing parts within the machine are in high demand as faster equipment is increasingly available and miners are in a race to mine more, faster. Mass mining equipment ranges, but the primary concern is selecting a chip, likely a graphic processing unit (GPU), for efficiency, speed, and consistency of operation. While the value of cryptocurrencies is unreliable and ranges vastly over short periods of time, the demand, and consequently price, for these chips has increased steadily.
With the mainstream reception of cryptocurrencies, for example, Bitcoin is now accepted by Overstock.com, it is fair to say that we will continue to see the acceptance of these new currencies. The opportunities and limitations within this model will be worth following.