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January 31, 2018updated 12 Jul 2022 11:09am

How can data centres cater for cryptocurrency miners?

Jon Leppard looks into how consolidation can help with the unique opportunities and challenges posed by cryptocurrency mining.

By Ellie Burns

Since the launch of Bitcoin in 2009, cryptocurrencies and blockchain, the promising technology that underpins them, have undergone a steady rise in prominence and popularity. The last few months in particular have seen cryptocurrencies pervade the public consciousness, which has resulted in a surge of investment in Bitcoin and other virtual currencies such as Ethereum, Litecoin and Ripple (XRP).

As these cryptocurrencies continue to mature, the process for creating new coins (known as ‘mining’) has become more complex. This has seen miners shift away from the use of decentralised computer networks to generate cryptocurrency, and given rise to the use of specialised hardware grouped in a single location. Consequently, cryptocurrency mining infrastructure is developing into a specialist but potentially profitable offering for data centre providers.

Whilst some cryptocurrency mining takes place in specialised facilities, some miners also choose to make use of colocation providers and managed services. Both approaches create a very particular set of challenges for data centre operators aiming to optimise the performance of cryptocurrency mining hardware.

For custom mining facilities, the challenge lies in minimising the astronomical (and ever increasing) cost of the mining process through effective capacity management and cooling, whilst colocation providers will face the additional task of balancing this alongside the demands of traditional, mission-critical infrastructure clients. However, given the promising nature of blockchain technology and its myriad potential future use cases, DC operators that are able to solve this particular conundrum early could reap the benefits in the long term.

Facilitate a winning mentality

Balancing the cost of cryptocurrency mining to achieve a profitable outcome is no easy task, because the algorithm that must be solved to process transactions and create new coins is constantly becoming more complex. As a result, the capacity demands and energy costs of cryptocurrency transactions far surpass those of traditional payment networks. Whilst the value of cryptos continues to rise, this is not necessarily an issue – but what happens if it falls?

In this situation, it comes down to the mentality of the miner. Some may choose to continue mining ‘at a loss’ in the hope that the cryptocurrency value bounces back, whilst others may choose to scale mining up or down almost ‘on the fly’. Either way, data centre operators must be able to predict the impact of scaling resources up or down when required, in order to avoid unnecessary expenditure on over-provision of capacity and to minimise the risk of failure scenarios.

Failure scenarios, and in particular the costs associated with specialised cooling, pose another pertinent question. Given the extremely short lifespan of mining hardware (often months or even weeks) miners must make a decision as to whether the energy costs of cooling are worthwhile, or whether a ‘rip and replace’ mentality should be adopted regarding hardware.

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This is also partly dependent on the value of cryptocurrency at a particular point in time. If the value were to fall, frequent expenditure on upgraded hardware could become unsustainable. Either way, data centre managers must be able to effectively predict cooling and power requirements for each iteration of hardware, in order for miners to make an educated decision regarding their preferred mining strategy.


Consider the miner details

For colocation providers that choose to sell space in their existing data centres to cryptocurrency miners, the considerations extend even further. Given the aforementioned differences between crypto mining hardware and mission critical servers, areas of the data centre used for mining will require special adaptations.

The introduction of new hardware into the DC environment is not dissimilar to a data centre consolidation project, so a similar principle applies. Data centre operators must be able to predict the impact that the introduction of new hardware to an existing data centre environment will have. Any potential issues must then be offset through processes such as installing containment, changing airflow and temperature set points, or upgrading cooling infrastructure.

To plan for this effectively, data centre operators must be able to predict the impact that the introduction of mining hardware will have on the data centre environment, because the cost of experimenting via trial-and error would be much too expensive and risky. In this situation, engineering simulation technology can prove its worth.

Using data centre management software with engineering simulation functionality provides a safe, offline environment to test any potential change to the DC environment without fear of potential consequences. Specifically, 3D modelling used to represent the data centre, in conjunction with power system simulation (PSS), and computational fluid dynamics (CFD) to predict cooling, can be used to ensure that cryptocurrency mining hardware transfers seamlessly into an existing data centre without adversely affecting other applications.

Blockchain is still very much a technology in its infancy, and as such will likely be subject to a rapid pace of evolution and a number of iterations before levelling out. But, when armed with the right tools, facilities providers should be able to adapt to these changes in such a way as to offer an effective and mutually profitable service to the technology’s pioneers.

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