A look at the Blockchain’s Infrastructure…
And how the mining industry needs to innovate.
Mining is often overlooked in discussions about bitcoin, and it is constantly marginalized in the larger conversation now taking place around the potential of blockchain technology. But with a deeper look it becomes clear that the mining process is the foundational component of both the virtual currency and the underlying blockchain technology.
Mining has steadily improved, iterating through CPUs, GPUs, FPGAs, and now ASICs. Even ASIC technology today is on par with the industry’s latest and greatest. From 130nm to 16nm/14nm in less than three years.
ASIC manufacturers are taking advantage of new and old methods to develop efficient, high performance chips. But for mining manufacturers to stay ahead of the competition they are going to have to find additional ways of remaining innovative.
Mining manufacturers have raised the most money in the ecosystem. BitFury $60mm, 21 Inc $116mm, KnCminer $29mm; these companies are using capital to build the next generation of chip design and find advantages to lower their operational costs.
Miners are deploying creative (some seemingly risky) ways to reduce heat in their facilities. We have seen approaches with mineral oils, liquid cooling, giant fans, and some even use a misting technology. Many of these methods are already being experimented with in large data centers by the likes of Facebook’s, Amazon, Apple, and Google.
Most mining facilities are in cold, remote areas of the world which reduces operational costs like hardware maintenance, electricity, and infrastructure build outs. The downside is there are risks associated with operating in unknown countries, especially if you’re not a local privy to the laws in that region. Things like unreliable electrical and internet infrastructure; corrupt governments, unpredictable weather outages or damage, and unruly landlords are just a few to mention.
There are multiple operations that are hosting in eco friendly facilities and taking advantage of wasted electricity. Some operations are near hydroelectric dams with some of the largest being in China. Chinese miners have made deals with hydropower dam operators and use the excess power produced by the dam for mining infrastructure. Some facilities look like old warehouses, manufacturing plants, abandoned military facilities, helicopter hangars, modified storage containers, and even abandoned power plants.
Miners have to continue to reduce their bottom line by innovating and finding new ways to produce 1 BTC for drastically less than its exchange price. In that pursuit of reducing their bottom line, some facilities are setup outside of cities in small towns, making it inconvenient for daily travel. In Asia there are mining farms across China, Malaysia, and Tibet near rivers and hydroelectric dams. Many have people living on site, monitoring and maintaining the farm for weeks at a time.
The current software infrastructure for mining is hindering the extensibility and growth of the blockchain. Debates are taking place about the blockchain size, investments are being made in some promising technologies that are built on top of the blockchain, but those innovations and the currency itself are of no value without some attention being paid to the underlying component, mining. HashRabbit recognized early on that these miners were the core foundation of the entire blockchain ecosystem, and we are trying to innovate on that core piece to make mining more efficient, secure, and profitable.
It may seem far fetched, but there is a future where Tesla’s Powerwall industrial batteries are used to store extra energy, solar panels are utilized to capture more of it, and hydroelectric solutions get deployed cost effectively. A future where mining devices could be used as light bulbs, home or office heaters, and used in everyday physical infrastructure like streetlights.
However in order to support this future, mining facilities need a platform that gives them the ability to manage and deploy thousands of machines at once. A platform that allows them to see at a glance, potential hardware failures, receive status alerts, reduce orphan blocks, and automate routine yet crucial processes. Maintainability and scalability are something our industry is focusing a lot on, just not particularly the mining component. For miners, it is a quest to find the lowest cost of ownership and operation, and we are trying to help.
Want to join us in that quest? Join our Beta at HashRabbit.co and learn more.