BitFury, a major Bitcoin hardware vendor, has entered the hosting and cloud mining business. Fueled by $20 million in recent venture funding, the company is rolling out a global data center network, anchored by a new 20 megawatt facility in the Republic of Georgia. The announcement is bound to fuel the company's status as a contender to be the first major Bitcoin IPO.
BitFury is a leader in the fast-growing market for specialized semiconductors for Bitcoin transaction processing, commonly known as mining. BitFury ASICs are well known in the mining world and the company is a major supplier of chips for some of the largest players in industrial mining, including several who will serve as anchors in its new facility in Georgia. The company estimates that 40 percent of all Bitcoins are mined using its chips.
With its entry into hosting and managed mining, BitFury reinforces a trend in which Bitcoin hardware vendors are becoming vertically-integrated one-stop shops, handling everything from chip design to data center deployments.
"Mining has become more than just hardware, and we are excited to offer managed services to enable customers to benefit from our specially designed data centers and cheap energy prices from clean energy sources,” said Valery Vavilov, the company's CEO.
BitFury has deployed data centers in Finland and Iceland, in addition to the new site in Georgia, which it says was deployed in about 30 days. That speed is possible because the company uses designs known as "hashing centers," which combine high density and low redundancy and are often built in warehouses or other powered shells. Here's what the facility looks like inside:
"Data center operations will become very important" in Bitcoin mining, said Marc Aafjes, chief strategy officer at BitFury. "I think that will be a differentiator in the near future."
CryptX and DigitalBTC are among the first clients using the new managed mining services offered by BitFury. Cryptx says its PetaMine operation controls about 2 percent of the global Bitcoin hash-rate (the number of Bitcoin calculations that hardware can perform every second).
“Professional hosted mining operations are the future of this market," said CryptX CEO Bert Valkenborgs. "CryptX operates in this space and has chosen BitFury’s hosted mining services for its project, PetaMine. We have worked together with BitFury on several occasions and we are very pleased with this business relationship.”
There's more facilities like these in the works. Bitcoin mining operations are expected to spend at least $600 million to deploy infrastructure in the second half of 2014. BitFury raised $20 million in funding in May, which CEO Vavilov said "validates our strategy and brings us closer to our aspiration of becoming the world’s first publicly listed Bitcoin company.”
In another recent example, CoinTerra, one of BitFury's competitors, told us earlier this week that it is building a 20-megawatt data center in Canada. This will be the first purpose-built data center for the company, which has been relying on data center providers. It recently signed a major colocation deal with CenturyLink Technology Solutions.
BitFury was founded in 2011 and currently has more than 40 employees working at offices in San Francisco and Amsterdam.