Inside BitFury's 20 Megawatt Bitcoin Mine

1sockchuck (826398) writes Bitcoin hardware vendor BitFury has opened a 20-megawatt data center to expand its cloud mining operations. The hashing center in the Republic of Georgia is filled with long rows of racks packed with specialized Bitcoin mining rigs powered by ASICs. It's the latest example of the Bitcoin industry's development of high-density, low-budget mining facilities optimized for rapid changes in hardware and economics. It also illustrates how ASIC makers are now expanding their focus from retail sales to their in-house operations as Bitcoin mining becomes industrialized.

Comments

20 megawatts

[Anonymous Coward]

pissed away on trendy pointless crypto nonsense

i can't believe this has gotten so stupid and out of hand

Re:20 megawatts

[JazzLad]

The hashing center in the Republic of Georgia...

...this is the perfect example of american greed...

Re:20 megawatts

[ShanghaiBill]

its just the most wasteful thing i can think

You should think harder. Gold fills much the same niche as bitcoins, and results in millions of tons of mine tailings, and mercury contaminated rivers. If bitcoin reduces the demand for gold by even 1%, every kilowatt is worth it.

Re:20 megawatts

[Anonymous Coward]

Wait, what? You do know that the circuit boards and crap that go into the ASIC and computer rigs and the cooling and all uses a lot more natural resources (including gold and the things called "rare earths") than a bit of gold mining right? Ever seen the disposal sites for computers? Lots of tailings and contamination there too. Bitcoin mining is funny. People here love imaginary currency even though they don't like imaginary property. It is imaginary and wasteful. Let's just leave it there.

Re:20 megawatts

[Boronx]

Modded down for telling the truth. These guys are wasting a small town's worth of power to do worthless calculations.

Re:20 megawatts

[tnk1]

Considering that bitcoin isn't big enough, nor has it been around long enough to bail out, using the bank bailouts as a comparison is a specious justification.

Just because a new system is different than a bad system, does not logically imply that it is a better system by default.

Re:20 megawatts

[ncc74656]

but this is the perfect example of american greed the most pure and wasteful greed i have ever seen.

If you'd taken ten seconds to click over to TFA, you would've learned it's in this Georgia, not this Georgia, you America-bashing twat.

Re:20 megawatts

[rogoshen1]

Fiat currency for all intents and purposes is also imaginary, as the value it holds is not a fundamental property of the bill or coin itself. It just happens to be represented in a physical form.

But that value only exists because the market by and large 'agrees' that this currency has this much purchasing power. See also: every single hyperinflation episode ever.

(Then again some snotty muckraker might point out the fact that the USD is only maintaining its value through perceived military capability,nostalgia, and status as the de facto world currency.. (Which is likely temporary if things continue).

IE, what's more wasteful, some computers in Georgia doing complex math, or propping up a currency/economy with an endless amount of unrecoverable debt, smart bombs, and drones?)

Re:20 megawatts

[pkinetics]

Am wondering if this is a broken window argument

Re:20 megawatts

[Anonymous Coward]

Doing some rough approximations (very rough) bitcoin mining electricity cost is roughly 6.2 times more expensive than mining gold...

Assuming: 0.05$/kWhr,
power cost at 1/4 $ value of bitcoin produced (rough guess based on yield of small scale bitcoin mining rigs I've witnessed),
average gold ore at 2g/tonne,
and average mining electrical consumption of 46.274kwhr/tonne ore (http://www.nrcan.gc.ca/sites/www.nrcan.gc.ca/files/oee/pdf/publications/industrial/mining/open-pit/Open-Pit-Mines-1939B-Eng.pdf)

20 megawatts generates $4,000 in bitcoin
$4,000 is equivalent to 5 ounces gold (conservatively at $800/ounce)
5 ounces is 140 grams, and 70 tonnes of ore at 2g/tonne
approximate electrical expense to mine 70 tonnes of ore at 46.274 kwhr/tonne (value from link above) is 3.2 Megawatts... significantly less than bitcoin mining.

Skimming the referenced report, the average energy cost/tonne ore includes mining, crushing/grinding, concentrating. so not counting refining and tailings/water management costs, but even at 1/4 of total electrical costs, bitcoin mining seems comparatively wasteful....

There's likely arguments for fotprints and long term environmental impacts of mining, but bitcoin still seems wastefull.

Re:20 megawatts

[jshazen]

Plenty of other imaginary currency exist that do the exact same thing bitcoin does, but better and no electricity waste aka timekoin is a good example.

I don't know. Timekoin looks pretty dodgy. Their "marketplace" has an expired SSL cert.

Re:20 megawatts

[DanielRavenNest]

The technology that underlies bitcoin, data secured by a series of chained hashes, such that the hash for one data block is part of the data for the next, enables a secure record keeping system for electronic data. Any change to past data, whether from errors or malicious tampering, is detectable because re-hashing the contents of a data block will give a different result than the one stored in the next block.

This is highly useful for a financial transaction system, the first application bitcoin represents. But secure digital record keeping applies to any kind of data whatsoever, and the applications are much wider than just digital currencies. To give one example, it can ensure the integrity of an operating system against malware. The original OS distribution and updates are encoded as a series of data blocks with chained hashes. Anything that is not supposed to be there would invalidate one or more blocks, and thus be detectable.

Corporate scrip (i.e private currencies) is a trivial application by comparison.

Good Thing

[Anonymous Coward]

Good thing you're not solving real problems. What. A. Fucking. Waste.

Re:Good Thing

[Burz]

Good thing you're not solving real problems. What. A. Fucking. Waste.

It just proves that a carbon tax cannot come soon enough.

Re:Good Thing

[bluefoxlucid]

They did that in AU. It didn't help.

Re:Good Thing

[ShanghaiBill]

It just proves that a carbon tax cannot come soon enough.

Except that their mining centers are located in Iceland, Georgia (the country, not the state), and Finland, close to cheap carbon free hydro electric dams.

Re:Good Thing

[jones_supa]

Are you aware of the scientific papers Folding has published?

Re:Good Thing

[Nimey]

We'll /all/ be paying for it, which internalizes the costs and incentivizes cleaner alternatives. Our grandchildren shouldn't have to suffer extreme climate change because people like you are selfish.

Re:Good Thing

[Krishnoid]

I would say that SETI has produced one of the most useful pieces of software available today for the use of the general public.

Re:Good Thing

[Vintermann]

The reason that power is cheap there in the first place, is that it isn't easy to transport elsewhere and they have more of it than they can use for other things.

Re:Good Thing

[TheTrueScotsman]

That is incorrect. The validity of a transaction depends only on how it relates to the transactions that precede it. Mining simply keeps track of the "official" history of transactions, to guard against double-spend attacks.

Transactions are useless unless they're confirmed in the blockchain. That's the whole point of bitcoin. Mining and the blockchain is all there is to bitcoin.

And that's another problem: the energy used for mining depends on the hashrate, not transaction rate. It's true that increasing popularity of Bitcoin rises both, but trying to calculate "energy per transaction" on that basis is pretty much the same as trying to calculate "drowned people per litre of ice cream consumed" on the basis that warm weather increases both.

You might have noticed that my calculation started off with network hash rate because that's where the energy is being used. I don't really think it's that important a calculation anyway, but I did it to show the $35 per transaction of the OP was incorrect. Indeed, if the transaction rate goes up faster than the hash rate, then the transaction cost is even lower.

Instead of criticizing, maybe you can come up with a better cost per transaction for bitcoin (because there surely is one).

Please answer me one question

[Opportunist]

As far as I can judge, and please correct me if I am wrong, running a bitcoin mining farm isn't really something that ties up a lot of your time. I might be a bit naive, but... isn't it just "flip the switch and, well, wait"?

If it's not so, the next question is probably moot, but if it is: Why would anyone SELL bitcoin mining rigs instead of simply building them and getting rich themselves? To me the whole deal smells a bit like those crystal ball experts who tell you next weeks lottery numbers... why, if it works, don't they play themselves and get rich themselves?

Re:Please answer me one question

[Rinikusu]

The guys that made all the money during the San Francisco Gold Rush weren't the guys panning for gold, but the guys selling shovels and food. Same concept here. Why get out there and hope to "get lucky" on a completely unproven commodity when you can sell the equipment to the actual speculators? It's not just a matter of flipping a switch and waiting, btw, there's power consumption. A farm like in the article isn't running off house mains, generally speaking, not to mention the actual space, cooling, and probably a security system to make sure someone just doesn't come in and steal your shit (or defecate on everything because $DRUNK).

Re:Please answer me one question

[Solandri]

Selling bitcoin mining rigs is a guaranteed profit.

Mining bitcoins is a potential profit, potential loss. It all depends on what happens to the value of bitcoins. Your reasoning only works if the equipment seller is absolutely certain that bitcoins will hold their value. From what I gather, the vast majority of people don't think they will, but will happily sell equipment to those who do.

Environmental ROI?

[nickovs]

This begs the question whether mining for BitCoins is more damaging to the environment than mining for precious metals, for a given value of return. The EPA emissions factor for electricity is about 0.69 tons of CO2 per megawatt hour, so producing the electricity used by this datacenter is, on average, dumping into the atmosphere 331 tons of CO2 per day or about 120,000 tons of CO2 per year. While there are many other forms of environmental damage from gold mining, a quick search suggest that the greenhouse emissions from gold extraction run to about 11.5 tons of CO2 equivalent per kg of Gold. At this rate 120,000 tons of CO2 yields of 10.5 tons of gold, worth nearly $500 million at today's price. Will this datacentre yield more than half a billion dollars worth of bit coins each year?

Re:Environmental ROI?

[OzPeter]

The EPA emissions factor for electricity is about 0.69 tons of CO2 per megawatt hour, so producing the electricity used by this datacenter is, on average, dumping into the atmosphere 331 tons of CO2 per day or about 120,000 tons of CO2 per year

Given that the data center is in the Republic of Georgia and not the US state of Georgia I don't think that the EPA estimates really have any relevance. If anything the numbers are probably much much worse.

Which ASIC is worth trying ?

[Anonymous Coward]

There are numerous offerings of bitcoin / altcoin asics in the market and often the information available are confusing

Which ASIC (or ASICs) are more efficient (in terms of result and/or in terms of result per unit of energy consumed ?

Any suggestion ?

Thanks !