Bitcoin Mining Arms Race Boosting Interest in Liquid Cooling
December 5th, 2013 By: Rich Miller
There’s a computing arms race going on in the world of Bitcoin. Interest in the digital crypto-currency is driving the development of specialized hardware chips, which are selling out almost as fast as they can be built. This is boosting interest in data centers using immersion cooling, in which high-density hardware is dunked into fluids similar to mineral oil.
This new frontier in high-performance computing can be seen in Hong Kong, where a bitcoin mining company called ASICMiner has created an unusual data center. Within the facility, rows of rack-mounted tanks are filled with Novec, a liquid cooling solution created by 3M. Inside each tank,densely-packed boards of ASICs (Application Specific Integrated Circuits) run constantly as they crunch data for creating and tracking bitcoins. As the chips generate heat, the Novec boils off, removing the heat as it changes from liquid to gas.
These systems are part of a huge computing network driving global payment processing for Bitcoin, which uses processing power to verify transactions. Participants in the network – which includes individuals, corporations and mining collectives – are rewarded with the issuance of new bitcoins, which happens about every eight minutes. There’s a wrinkle: Over time the algorithms make it progressively harder to earn new bitcoins. If processing power remained static, it would take much longer to generate new bitcoins. The solution: more computing power!
Bitcoin mining can be done with traditional CPUs or GPUs, but most serious players have graduated to specialized chips such as FPGAs (Field Programmable Gate Arrays) or ASICs that can be optimized for specific workloads. This has led to the emergence of a new class of hardware vendors selling custom hardware for bitcoin mining.
There are two key elements in bitcoin mining: computing power and electric power. Miners must make the most of both resources.
The state of bitcoin mining hardware is perhaps best expressed by Ravi Iyengar, who left a position as lead CPU architect at Samsung to launch CoinTerra, a startup building custom ASIC hardware for the bitcoin market. “I’ve been in arms races throughout my career – AMD, ARM, Intel,” Iyengar told Reuters. “But none of them match the intensity of Bitcoin mining. Each month in Bitcoin mining is like a year.”
Austin-based CoinTerra launched in August after closing a $1.5 million seed round of financing. It quickly sold out its first batch of units, and a similar sellout was reported by HashFast, a Bay Area startup featuring alumni of Xerox PARC and Engine Yard. Both CoinTerra and HashFast are building ASICs featuring state-of-the-art 28nm chip designs. Other early leaders in the Bitcoin hardware market include Avalon, KnCMiner, BitFury and Butterfly Labs.
The performance benchmark for Bitcoin hardware is gigahashes (GH) per second. The hash rate is the number of bitcoin calculations that hardware can perform every second. Tools have sprung up to help aspiring miners evaluate hardware performance and the economics of mining, including The Genesis Block and Decentralized Hashing.
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Learn how to own Bitcoin and the alternative cryptocurrencies that are going up in value very rapidly at http://www.crypto-coins.org
They teach you how to get Bitcoin and where to go to get the alt coins. My Megacoin has gone up 5,660% this month. Worldcoin is also up substantially. This is due to the Wall Street Journal bringing this opportunity to the attention of investors, but they teach you all about that at crypto-coins.org
In my opinion the mining of Bitcoins isn’t full of profit in Germany! The energy costs too much! If the price of Bitcoins is going further, then it will be profitable in Germany too!
KevinPosted December 6th, 2013
It’s actually the improvements in computing power which lead to bitcoins being harder to mine. The difficult level of bitcoin mining is regularly adjusted so that on average one bitcoin should be mined every 10 minutes (3,600 a day). If total computing power on the bitcoin mining network remained static then the difficulty wouldn’t change. As more people start mining and get better equipment this brings the overall computing power up and so the difficulty has to be adjusted upwards to bring the mining rate down.
What’s happening now is a arms race where people with the most money can buy the best mining rigs the earliest and mine the bitcoins faster than everyone else on the network, forcing the difficulty level up again. The only winners are the mining chipset makers who sell the units for cash 3 months before the machines are actually delivered, at which point they only have a few months before they essentially obsolete themselves).
It is essentially a pyramid scheme guaranteed to end in another 15 years at the most when there should theoretically be no more coins to be mined (barring quantum computing being applied to this and putting an end to it all).
Rich- Awesome article! We included it in our Monthly Resource Roundup http://www.interworx.com/community/the-monthly-round-up-decembers-best-system-administration-hosting-security-and-enterprise-it-content/