Much is happening in the bitcoin mining data center world, and not all of it is good. While two major players in the space, BitFury Group and KnC Miner, announced big expansion projects, another player, GAW Miners is going down in flames, the latest in its story being official fraud accusations by the SEC, which called GAW a “Ponzi scheme.”
While some bitcoin mining data center capacity is leased from traditional data center providers, most of the world’s blockchain servers run in massive warehouses quickly outfitted with high-capacity power and cooling systems but not nearly as much redundancy as designed into regular data centers.
If data center providers were somewhat weary of leasing space to bitcoin mining companies that offer mining services or host mining hardware before the shakeout that started last year, caused by a sharp drop in value of the digital currency, they are much wearier now.
C7 Data Centers has sued mining company CoinTerra, which had defaulted on debt and stopped paying to the data center provider for services. CoinTerra also had a sizable deployment with CenturyLink, but CenturyLink was quiet about the 10 MW of capacity the mining firm leased from it.
Here’s a roundup of this month’s developments in the bitcoin mining data center market:
SEC Accuses GAW of Running Ponzi Scheme
Homero Joshua Garza, also known as Josh Garza, and his companies GAW Miners and ZenMiner have been accused of defrauding investors via a simple Ponzi scheme, according to the SEC. Garza allegedly promised investors high returns from his cloud mining business but never built the scale of computing power he was describing to them, paying returns to existing investors using money raised from new ones.
Garza told us in an interview last year that GAW, also known as Geniuses at Work, was operating 12 data centers at the time and that it was on track to making $150 million in sales annually. The company has been sued by the utility Mississippi Power for unpaid electrical bills, and a group of investors and customers have been pursuing legal action against GAW since earlier this year.
KnC Building Fourth Sweden Data Center
KnC Miner announced plans to build a fourth bitcoin mining data center on its campus in Boden, Sweden – a small town about 20 miles north of Luleå, home to Facebook’s massive European data center.
KnC’s new data center will have 30 MW of capacity. The company has been expanding capacity at the site rapidly, first announcing a 10 MW data center in Boden in 2014, and then unveiling plans to build out another 20 MW the same year.
Boden is home to another bitcoin mining data center operated by a company called MegaMine, which leases the facility from data center provider Hydro66.
BitFury to Launch Liquid-Cooled Facility in Republic of Georgia
BigFury Group said it will launch its third data center in the Republic of Georgia this week. This will be a 40 MW facility, where servers will be cooled using immersion-cooling technology by Allied Control, a company BitFury acquired earlier this year. The cooling system is based on a design by 3M, the company that supplies the dielectric fluid used in the system.
The cooling technology enables the company to pack up to 250 kW per rack while substantially reducing energy consumption of the cooling system, the company said in a statement.