Crypto Mining Data Centers: An Understanding

What is Cryptocurrency?

Cryptocurrency, crypto-currency, or crypto is a form of currency that is constructed and created with a collection of binary data. It is designed to work as a medium of exchange where individual coin ownership records are stored in a ‘ledger’, which is a computerized database using strong cryptography to secure transaction records. This controls the creation of additional coins and verifies the transfer of coin ownership.

Some crypto schemes use validators such as tokens to maintain the cryptocurrency. In a proof-of-stake model, owners put up their tokens as collateral, in return they get authority over the token in proportion to the amount they stake.  Generally, these token stakeholders get additional ownership in the token over time via network fees, newly minted tokens or other such reward mechanisms. Cryptocurrency does not exist in physical form (like paper money or coins) and is typically not issued by a central authority. Cryptocurrencies typically use decentralized control as opposed to a central bank digital currency (CBDC).   When a cryptocurrency is mined or created prior to issuance or issued by a single issuer, it is generally considered to be centralized. When implemented with decentralized control, each cryptocurrency works through distributed ledger technology, typically a blockchain, that serves as a public financial transaction database

What is a Ledger?

A ledger, also called a shared ledger, distributed ledger technology (DLT) or a wallet, is a consensus of replicated, shared, and synchronized digital data, geographically spread across multiple sites, countries, or institutions. Unlike with a centralized database, there is no central administrator.

This can also be known as a Replicated Journal Technology (RJT) since the information is replicated in the nodes containing full copy of the information and the information in the blocks is included in timely order, more in the form of an accounting journal than as an accounting ledger.

A peer-to-peer network is required as well as consensus algorithms to ensure replication across nodes is undertaken. One form of distributed ledger design is the ‘blockchain’ system, which can be either public or private.

A blockchain is a growing list of records, called ‘blocks’, that are linked together using cryptography. It’s also been described as a “trust-less and fully decentralized peer-to-peer immutable data storage” that is spread over a network of participants often referred to as ‘nodes’.  Each block contains a cryptographic ‘hash’ of the previous block, a timestamp, and transaction data (generally represented as a ‘Merkle Tree’).  The timestamp proves that the transaction data existed when the block was published in order to get into its hash.  As blocks each contain information about the block previous to it, they form a chain with each additional block reinforcing the ones before it. Therefore, blockchains are resistant to modification of their data because once recorded, the data in any given block cannot be altered retroactively without altering all subsequent blocks.

Blockchains are typically managed by a peer-to-peer network for use as a publicly distributed ledger, where nodes collectively adhere to a protocol to communicate and validate new blocks. Although blockchain records are not unalterable as forks are possible, blockchains may be considered secure by design and exemplify a distributed computing system with high Byzantine fault tolerance.

The blockchain was invented by a person (or group of people) using the name Satoshi Nakamoto in 2008 to serve as the public transaction ledger of the cryptocurrency ‘Bitcoin’. The identity of Satoshi Nakamoto remains unknown to date. The invention of the blockchain for Bitcoin made it the first digital currency to solve the double-spending problem without the need of a trusted authority or central server. The Bitcoin design has inspired other applications and blockchains that are readable by the public and are widely used by cryptocurrencies. The blockchain is considered a type of payment rail. Private blockchains have been proposed for business use but Computerworld called the marketing of such privatized blockchains without a proper security model “snake oil”. However, others have argued that permissioned blockchains, if carefully designed, may be more decentralized and therefore more secure in practice than permissionless ones

Crypto Mining Data Centers

Traditionally, these were labelled as ‘mining farms’ and were large hangars in remote areas with cold climates, but with significant power.  However, as we have progressed further on the crypto journey, more purpose-built facilities have been established and these are commonly known as data centers – ‘mining’ data centers.

Mining farms were initially constructed, in most cases with no real structure to the deployment of miners, using distribution racking to hold the miners, with the walls of the units having slots cut in to allow for airflow and that was it. But now, true mining data centers are starting to appear that are significantly more structured and designed more in line with existing data centers, allowing for all the design aspects you would normally see in a data center facility, including that of power and fire suppression plus more modern cooling.

Historically, the mines were cooled by the deployment location climate.  For example, when deployed in areas such as Russia which lines the Artic Circle, it is easier to just allow the air to pass through, but in some cases this is not really practical.  Mining data centers are appearing in more “standard/hot” areas such as Texas, where power is cheap, but without access to the cooler climate of areas such as Russia, Canada or Iceland for example.

Crypto Mining Deployment

USystems, with their Crypto focused ColdLogik brand of Rear Door Heat Exchangers and purposely designed enclosures, are aligned and constructed to provide a complete deployment for a Crypto Mining Data Center. An example of this is 35x miners, in an 800mm x 1200mm 52RU cabinet that has purpose built reinforced slide-in shelves and corresponding CL23 RDC, capable of up to 200kW of cooling per cabinet.

When standard S19 miners are working at circa 3.2kW per unit (without Overclocking), a deployment of 112kW per cabinet is “Standard”.

This also now means that all mining areas no longer have to be in cold climate locations and can be deployed anywhere in the world, or where power is cheap, as the ColdLogik RDCs can provide up to 100% free cooling, meaning a significant saving operationally.

Crypto Mining Footprint

In traditional mining farms, the layout structure of the miners utilized a distribution style racking system, supporting the miners as shown here. This equated to around 21 units in the footprint area of a standard data center cabinet. This image shows a traditional deployment in the mining industry that would be classed as an unorthodox deployment where space is lost due to the need to cool.

With ColdLogik, we can hold 35 miners in a cabinet footprint, a gain of around 42%, and these can be deployed within a standard data center configuration, increasing the footprint to house more miners and efficiently cool in any region.

Closing Summary

Crypto mining has fast become a popular form of currency.  Adoption is still on the increase, but it is still looked upon as potentially underhand as it is still unregulated, and though vast fortunes can be made, these fortunes can also be lost in some cases due to its volatility.

China used to be the crypto mining capital of the world until it was made illegal.  This has meant that other areas, especially in the USA like Miami, are vying to become crypto mining hotspots. The one notable issue is that the way crypto mining is delivered there, by only a handful of colocation data center providers that can truly help to support the extreme high-density power and cooling requirement necessary for mining, with all other data centers building specifically to meet the demand.

The fact is that mining is an anomaly compared to traditional hardware deployments, as it does not require redundancy and exceeds over 100kW on every rack and sustainable infrastructure to reduce the pricing. The availability could be classed as a difficult request, unless you opt for ColdLogik from USystems.

Get in touch with your regional ColdLogik salesperson for support on understanding and delivery of crypto mining data center solutions into your facility.