Bitcoin has long been the championed currency of the crypto world but, with only a limited supply of coins to mine, it has jumped from being a hobby for individuals to big business.
Mines are becoming corporate but, with global regulation of cryptocurrency still far away and a huge amount of power and energy needed to mine, industrial mining can be costly.
Still, the trend for cryptocurrency sees no sign of abating, with a lot of large betting sites accepting some variations since 2015.
With this increase in demand and support from Russia, where mining is legal and soon to be regulated, one company has grown from being a passion for individuals into a new, energy-efficient investment.
A far cry from solo mining, Minery is currently creating large, purpose-built sites that use around 75 megawatts of energy and employ up to eight people per location. The growth of this industry and hope of regulation is giving companies good reason to believe that the demand for such infrastructure will continue over coming years.
A modern-day gold rush
Some experts are likening the rise in numbers of these data centers to the gold rush, with corporations looking to benefit from the opportunities mining offers. Minery has announced that when their new center opens in October they will be mining Bitcoin as well as other major currencies including ethereum (ETH), ethereum classic (ETC), Litecoin (LTC), Dash, ZCash, and Monero (XMR).
Like many others, Minery started as a small operation two years ago mining for themselves before offering their services to a range of clients. Now they are expanding into central Russia, where energy costs are lower, building a data center in order to keep up with demand. But with the number of these centers increasing, companies have to find various ways of standing out from their competitors when seeking investment. Minery has said that investors are particularly attracted to the service they will be offering because of the reduced energy rate they have secured.
Finding where to settle
The shift toward industrial mining has led to companies seeking the best environment for large warehouses to house the processors required to mine on a large scale. Beyond simply looking for locations with sufficient space, companies have to weigh up potential locations’ climate, access to energy, and connection speed. With the optimum average temperature for a cryptomine being 28.4F (allowing for optimal heat exchange conditions), many companies are choosing locations in Siberia. There is also a question of legality but in Russia mining is a legitimate commercial activity.
The energy problem
With temperature being the top consideration for companies when choosing where to locate their cryptomine, the location’s energy supply is also vital in order for the mine to be able to function correctly. Minery will be settling in Russia due to its ideal conditions for mining and the company has also negotiated a specific energy tariff with their partner, Bratsk Electric Grid: “As we reached our maximum capacity at our location, we’ve started looking for a place, where we can place large compound with affordable price for electricity (in Moscow 0.09 USD/kwh). So we found locations in the Irkutsk region where the electricity price is very low (0.04 USD/kwh) provided by our partner Bratsk Electric Grid Company.”
In other countries, such as Iceland, there is growing concern over the country’s ability to produce enough energy to serve the growing number of cryptocurrency mines. In 2018, the use of energy by data centers is set to overtake household energy use in the country, according to the Associated Press. After a “slow start” following initial interest from companies wanting to set up data centers in the country, the government is now looking at having to slow down investment due to the stress the industry is putting on the country’s energy supply.
Keeping the processing center green
There is no disputing that mining uses a large amount of energy and this has led to questions about how companies can make their operations greener. Bitcoin spoke out on the topic, saying that, although it acknowledges the amount of energy used in mining is significant, when it is looked at on a larger scale Bitcoin only accounted for 0.14% of the world’s generated electricity. However, it is something that companies like Minery are taking into consideration. Their business model is based on a low energy rate from Bratsk Electric Grid Company. Minery has chosen a location for its data center in Irkutsk, near three major hydro-power stations, to ensure its energy supply is as eco-friendly as possible.