Mining Decentralization: Go Local Or Go Home
By Bitcoin Miner on ALTCOIN MAGAZINE
Demand for miners continues to exceed supply. Case in point, each time Bitmain releases a new batch of hardware they almost immediately need to slap “sold out” on their website. Bitcoin and altcoin mining will continue to grow over the coming years. Now is an important time for us, the members of the mining community, to collectively decide what form the industry will take as it relentlessly expands.
But, you might ask, what sort of control do we have? What power can we exert on the beast that is the mining industry? Well, my answer is simple: choose local mining farms over big brand names.
For much the same reason we’ve been told over the years to support local stores and farms (ya know, the kind that produces food, not Bitcoin), we should be supporting local mining farms. Similar principles apply, not the least of which is mining decentralization.
Look at the history of any industry and you’ll see how things tend to play out. As any industry evolves from infancy to maturity we see a recurring pattern of big fish eating up all the little fish. Eventually, you’re left with a few key players, the Googles, Apples, and Microsofts who dominate the market share and are granted enormous power. And who granted them that power? YOU did! By choosing their products and services we have all voted to enable their market dominance.
As miners, we want to maintain decentralization, and yet oftentimes we are unknowingly pushing towards a centralized mining environment by overlooking small and mid-sized mining farms in favor of the big brands. Now, what I’m discussing here applies to miners who choose to host their equipment at someone else’s mining farm, which just so happens to be the majority of mining hardware customers. How do I know this? I work for an extremely well-known hardware manufacturer that I may or may not have mentioned earlier in the article.
There are many reasons you should choose local mining farms to host your ASIC and GPU mining hardware, and we can discuss those other reasons in the comments. Right now I’m focusing on decentralization, which typically comes up in conversation when discussing Chinese mining companies and expressing worries they will control all the hashrate and implement a 51% attack, or some other nefarious action. While this is a legitimate concern, it’s not something I’m worried about based on what I’ve seen while working in the industry.
What I am concerned about is that we are unwittingly granting a few handfuls of companies nearly complete control over the infrastructure of the mining industry. And by infrastructure I mean the data centers/mining farms that host tens of thousands of mining units. These industrial-scale mining farms seemingly have an economic advantage due to economies of scale; more shared costs per MW of capacity at the facility, lower kWh rates due to the high demand load, etc. Seems impossible to beat, right?
Not necessarily. I have worked with mining farms of all shapes and sizes across North America. Helping to make sure they are set up to be successful, despite their comparatively smaller power capacity. Among the 80+ mining farms, I’m connected with, nearly 60 have hosting rates less than or comparable to that of the top 5 largest mining companies. And while hosting fees fluctuate regularly based on the price of Bitcoin, I am consistently recommending customers to local mining farms and they are locking in pricing better than what is being offered by the industrial-scale mining companies.
And let’s not forget about all the at-home miners out there who work hard to get their rigs set up. Those miners who post helpful YouTube videos and comment in forums. It’s this decentralized community of local and home-based miners who supports the mining community from the ground up.
If you need to find a good local hosting company who will take care of your ASIC or GPU miners, feel free to reach out and I’m happy to make introductions to mining farm operators. If you run a mining farm and would like to get on my verified list of hosting providers let’s talk.
What are your thoughts? Do you agree we should support mining companies of all shapes and sizes? Or should we just give in and stop fighting against the inevitable oligarchy that is vying to control the industry?
