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Inside BitFury's 20 Megawatt Bitcoin Mine

Unknown Lamer posted about 1 month ago | from the fools-and-their-megawatts dept.

Bitcoin 195

1sockchuck (826398) writes Bitcoin hardware vendor BitFury has opened a 20-megawatt data center to expand its cloud mining operations. The hashing center in the Republic of Georgia is filled with long rows of racks packed with specialized Bitcoin mining rigs powered by ASICs. It's the latest example of the Bitcoin industry's development of high-density, low-budget mining facilities optimized for rapid changes in hardware and economics. It also illustrates how ASIC makers are now expanding their focus from retail sales to their in-house operations as Bitcoin mining becomes industrialized.

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20 megawatts (2, Interesting)

Anonymous Coward | about 1 month ago | (#47582847)

pissed away on trendy pointless crypto nonsense

i can't believe this has gotten so stupid and out of hand

Re:20 megawatts (0)

Anonymous Coward | about 1 month ago | (#47582887)

I hear someone's jealous for not jumping early...

Re:20 megawatts (0, Flamebait)

Anonymous Coward | about 1 month ago | (#47582915)

i did jump early made a few dozen thousand it was good, its just the most wasteful thing i can think of mod me troll all you want.
but this is the perfect example of american greed the most pure and wasteful greed i have ever seen.

Re:20 megawatts (0)

Anonymous Coward | about 1 month ago | (#47583111)

If compensation for the environmental impact of power plants were included in the price of electricity, then you'd be neutral about it. If the compensation were bigger than needed, then you'd be cheering for Bitcoin and any other form of waste. So clearly your issue isn't with Bitcoin, but with the U.S. government's unwillingness to implement such a compensation system.

Re: 20 megawatts (0)

Anonymous Coward | about 1 month ago | (#47583327)

A system that would throw 2/3 of the working to upper middle class into poverty . Remember humans and all thier activities are part of the natural workings of our planets for good or for bad in the same way a volcano can erupt and threw pollution far and wide

Re:20 megawatts (0)

Anonymous Coward | about 1 month ago | (#47583995)

if the entire worlds government did that perhaps

Re:20 megawatts (4, Funny)

JazzLad (935151) | about 1 month ago | (#47583145)

The hashing center in the Republic of Georgia...

...this is the perfect example of american greed...

Which ASIC is worth trying ? (2, Interesting)

Anonymous Coward | about 1 month ago | (#47584067)

There are numerous offerings of bitcoin / altcoin asics in the market and often the information available are confusing

Which ASIC (or ASICs) are more efficient (in terms of result and/or in terms of result per unit of energy consumed ?

Any suggestion ?

Thanks !

Re:20 megawatts (3, Insightful)

ShanghaiBill (739463) | about 1 month ago | (#47583203)

its just the most wasteful thing i can think

You should think harder. Gold fills much the same niche as bitcoins, and results in millions of tons of mine tailings, and mercury contaminated rivers. If bitcoin reduces the demand for gold by even 1%, every kilowatt is worth it.

Re:20 megawatts (3, Insightful)

Anonymous Coward | about 1 month ago | (#47583249)

Wait, what? You do know that the circuit boards and crap that go into the ASIC and computer rigs and the cooling and all uses a lot more natural resources (including gold and the things called "rare earths") than a bit of gold mining right? Ever seen the disposal sites for computers? Lots of tailings and contamination there too. Bitcoin mining is funny. People here love imaginary currency even though they don't like imaginary property. It is imaginary and wasteful. Let's just leave it there.

Re:20 megawatts (0)

Anonymous Coward | about 1 month ago | (#47583287)

Wait, what? You do know that the circuit boards and crap that go into the ASIC and computer rigs and the cooling and all uses a lot more natural resources (including gold and the things called "rare earths") than a bit of gold mining right? Ever seen the disposal sites for computers? Lots of tailings and contamination there too. Bitcoin mining is funny. People here love imaginary currency even though they don't like imaginary property. It is imaginary and wasteful. Let's just leave it there.

It is too bad that everyone latches onto bitcoin but an entire industry is built around turning electricity into money, especially when one does not have to pay for the electricity. Plenty of other imaginary currency exist that do the exact same thing bitcoin does, but better and no electricity waste aka timekoin is a good example.

Re:20 megawatts (3, Insightful)

rogoshen1 (2922505) | about 1 month ago | (#47583529)

Fiat currency for all intents and purposes is also imaginary, as the value it holds is not a fundamental property of the bill or coin itself. It just happens to be represented in a physical form.

But that value only exists because the market by and large 'agrees' that this currency has this much purchasing power. See also: every single hyperinflation episode ever.

(Then again some snotty muckraker might point out the fact that the USD is only maintaining its value through perceived military capability,nostalgia, and status as the de facto world currency.. (Which is likely temporary if things continue).

IE, what's more wasteful, some computers in Georgia doing complex math, or propping up a currency/economy with an endless amount of unrecoverable debt, smart bombs, and drones?)

Re:20 megawatts (0)

Anonymous Coward | about 1 month ago | (#47583639)

Fiat currency is backed by its ability to pay the government that produces it. Most importantly it can prevent the government from coming and depriving you of your liberty. Governments that make a currency generally require you to pay your taxes in that currency. If you fail to do this the government sends men to take your stuff or put you in jail. This guarantees demand.

Re:20 megawatts (1)

tnk1 (899206) | about 1 month ago | (#47583285)

That all depends on the ratio of waste/toxic material produced between gold and Georgian wattage, which I don't think that anyone has solid facts on. I'm guessing that power generation in the Republic of Georgia isn't the cleanest that the world has ever seen, being that it is in a small, former Soviet republic.

So, despite the admitted use of some rather nasty chemicals and left overs from gold mining, what goes into those MW of power generation isn't necessarily any better.

I'd love it if someone posted some numbers.

Re:20 megawatts (1)

CanHasDIY (1672858) | about 1 month ago | (#47583461)

Don't forget about the nasty chemicals and processes (and apparently, politics) involved in making computer components.

Re:20 megawatts (1)

Nimey (114278) | about 1 month ago | (#47583713)

Never mind that the electricity might be made with coal, which itself results in millions of tons of mine tailings, contaminated rivers, et al, to say nothing of the pollution and radioactivity caused by burning it.

Re:20 megawatts (1)

phorm (591458) | about 1 month ago | (#47583843)

Gold coins are fairly useless in functional value, but as a conductor or a rust-resistant coating gold is pretty common.

Re:20 megawatts (3, Informative)

ncc74656 (45571) | about 1 month ago | (#47583521)

but this is the perfect example of american greed the most pure and wasteful greed i have ever seen.

If you'd taken ten seconds to click over to TFA, you would've learned it's in this Georgia [wikipedia.org] , not this Georgia [wikipedia.org] , you America-bashing twat.

Re:20 megawatts (1)

alen (225700) | about 1 month ago | (#47583073)

from what i read bitcoin is going to replace some of the kooky virtual currencies that multinationals have used for their virtual goods stores like the old MS coins to buy xbox games and DLC.

the cost is paying to hedge against currency fluctuations and paying the exchange costs. bitcoin might solve this problem

Re:20 megawatts (1, Interesting)

ShanghaiBill (739463) | about 1 month ago | (#47583163)

i can't believe this has gotten so stupid and out of hand

However, no bitcoin miner has been bailed out with my tax dollars. So they are still doing better than the "real" banks.

Twenty megawatts at 5 cents per kwhr is about $1000/hour. Wall Street likely uses a thousand times as much just to light their offices.

Re:20 megawatts (4, Insightful)

tnk1 (899206) | about 1 month ago | (#47583329)

Considering that bitcoin isn't big enough, nor has it been around long enough to bail out, using the bank bailouts as a comparison is a specious justification.

Just because a new system is different than a bad system, does not logically imply that it is a better system by default.

Re: 20 megawatts (1)

Anonymous Coward | about 1 month ago | (#47583373)

The USA made money on the bank bailouts. Big money . Most of the banking problems had to do with non enforcement of existing regulations and ignorant home buyers . If you make $40 k a year you can not buy a $600,000 house . Read the press clippings from the senator Charles shumer of the world, they were pressing the banks to lend to lower income people from 2004-2007 . Stop sounding like hitter blaming one group for the failings of the country .

considering how banks (1)

publiclurker (952615) | about 1 month ago | (#47583953)

serve an actual purpose, your comparison is between apples and unicorns.

Re:20 megawatts (4, Insightful)

Boronx (228853) | about 1 month ago | (#47583281)

Modded down for telling the truth. These guys are wasting a small town's worth of power to do worthless calculations.

Re:20 megawatts (0, Troll)

Gothmolly (148874) | about 1 month ago | (#47583893)

They're not wasting, they're buying power. Also, whether or not the town is small is irrelevant, unless you're trolling.

Re:20 megawatts (2)

pkinetics (549289) | about 1 month ago | (#47584057)

Am wondering if this is a broken window argument

Good Thing (5, Insightful)

Anonymous Coward | about 1 month ago | (#47582885)

Good thing you're not solving real problems. What. A. Fucking. Waste.

Re:Good Thing (0)

Anonymous Coward | about 1 month ago | (#47582941)

At least we can hope that getting into Bitcoin mining will introduce people also to other forms of distributed computing such as Folding@home.

Re:Good Thing (1)

maliqua (1316471) | about 1 month ago | (#47582983)

how would that work?

Hey look this model of distributed computing that i only got into for personal profits, is pretty clever why don't i do it for free instead.

the problem is the type of people that get heavy into bitcoin mining aren't the kinda that want to give back they're the kind that want to suck every bit of value from something and leave a withered husk for everyone else.

Re:Good Thing (1)

buckfeta2014 (3700011) | about 1 month ago | (#47583319)

Folding and seti are equally as wasteful. Have either ever generated anything useful?

Re:Good Thing (3, Informative)

jones_supa (887896) | about 1 month ago | (#47583449)

Are you aware of the scientific papers [stanford.edu] Folding has published?

Re:Good Thing (4, Insightful)

Burz (138833) | about 1 month ago | (#47582987)

Good thing you're not solving real problems. What. A. Fucking. Waste.

It just proves that a carbon tax cannot come soon enough.

Re:Good Thing (0)

Anonymous Coward | about 1 month ago | (#47583053)

It just proves that a carbon tax cannot come soon enough.
How about *YOU* pay for that tax? Oh you will btw. You think for one second any business is going to 'eat' that cost? Dream on.

Re:Good Thing (2)

Nimey (114278) | about 1 month ago | (#47583743)

We'll /all/ be paying for it, which internalizes the costs and incentivizes cleaner alternatives. Our grandchildren shouldn't have to suffer extreme climate change because people like you are selfish.

Re:Good Thing (2)

bluefoxlucid (723572) | about 1 month ago | (#47583235)

They did that in AU. It didn't help.

Re:Good Thing (0)

Anonymous Coward | about 1 month ago | (#47583503)

Can you elaborate? A carbon tax "doesn't help" only if you don't know how to spend it.

Re:Good Thing (2)

ShanghaiBill (739463) | about 1 month ago | (#47583239)

It just proves that a carbon tax cannot come soon enough.

Except that their mining centers are located in Iceland, Georgia (the country, not the state), and Finland, close to cheap carbon free hydro electric dams.

Re:Good Thing (0)

Anonymous Coward | about 1 month ago | (#47583381)

Which really doesn't matter. If you're using clean power for bitcoin mining, then you're not using the clean power for other things that use power and actually contribute to something other than speculation.

Re:Good Thing (0)

Anonymous Coward | about 1 month ago | (#47583471)

What other uses of energy do you disapprove of?

Re:Good Thing (1)

OzPeter (195038) | about 1 month ago | (#47583557)

What other uses of energy do you disapprove of?

Obviously not /.

Re:Good Thing (0)

Anonymous Coward | about 1 month ago | (#47583357)

Will China pay the carbon tax? If so, let's do that.

If not? Then let's find another solution.

Better yet. Let's find a better solution than charging a tax that will regularly get evaded and inconsistently applied so that it only hurts the people with scruples.

Re:Good Thing (1)

CanHasDIY (1672858) | about 1 month ago | (#47583541)

Good thing you're not solving real problems. What. A. Fucking. Waste.

It just proves that a carbon tax cannot come soon enough.

Too bad it's a total scam (which we knew about way back in 2009, BTW):

The new carbon credit market is a virtual repeat of the commodities-market casino that's been kind to Goldman, except it has one delicious new wrinkle: If the plan goes forward as expected, the rise in prices will be government-mandated. Goldman won't even have to rig the game. It will be rigged in advance.

Here's how it works: If [Cap and Trade] passes, there will be limits for coal plants, utilities, natural-gas distributors and numerous other industries on the amount of carbon emissions (a.k.a. greenhouse gases) they can produce per year. If the companies go over their allotment, they will be able to buy "allocations" or credits from other companies that have managed to produce fewer emissions. President Obama conservatively estimates that about $646 billion worth of carbon credits will be auctioned in the first seven years; one of his top economic aides speculates that the real number might be twice or even three times that amount.

The feature of this plan that has special appeal to speculators is that the "cap" on carbon will be continually lowered by the government, which means that carbon credits will become more and more scarce with each passing year. Which means that this is a brand new commodities market where the main commodity to be traded is guaranteed to rise in price over time. The volume of this new market will be upwards of a trillion dollars annually; for comparison's sake, the annual combined revenues of all electricity suppliers in the U.S. total $320 billion.

Read the whole piece here [rollingstone.com]

Re:Good Thing (1, Interesting)

ultranova (717540) | about 1 month ago | (#47583129)

Good thing you're not solving real problems. What. A. Fucking. Waste.

How much energy is spent fighting against counterfeit cash? And do you perhaps think point-of-sale systems and credit/debit card systems or wire transfers require none? And armored trucks for moving money, those surely require no fuel?

Re: Good Thing (0)

Anonymous Coward | about 1 month ago | (#47583283)

Does the amount of fuel those cars need double every couple of months?

Re:Good Thing (0)

cyborg_monkey (150790) | about 1 month ago | (#47583809)

Oh shut up.

Re:Good Thing (1)

wonkey_monkey (2592601) | about 1 month ago | (#47583295)

Why did you spend 10 seconds writing that post when you could be contributing to the search for a cure for cancer?

How many precious minutes have you wasted combing your hair? Trimming your toenails? Time's a-wastin'!

Re:Good Thing (0)

Anonymous Coward | about 1 month ago | (#47583787)

Why did you spend 10 seconds writing that post when you could be contributing to the search for a cure for cancer?

I'm waiting for my computer to finish processing data related to climate change while I type this. I help find the boundary conditions needed to make more accurate models. What are you doing that's so important?

Could Be Curing Cancer (1)

WheezyJoe (1168567) | about 1 month ago | (#47583431)

Good thing you're not solving real problems. What. A. Fucking. Waste.

This a thousand times over. Run this equipment with World Community Grid or Folding@Home, might lead to curing cancer [worldcommunitygrid.org] or AIDS [worldcommunitygrid.org] . Fuck, just donate it to some medical research effort [alz.org] and maybe in 20 years a cure will come out and save your ass.

Bitcoin? Megawattage flushed down the entropy hole. Wouldn't it suck for all the bitcoiners if a talented mathematician found a way to trivially circumvent [wikipedia.org] the bitcoin exchange system or if someone came up with a new cryptocurrency that people just liked better (I think both are just a matter of time), leaving Bitcoiners with worthless data stored on hard drives. Maybe all that fine computing equipment won't end up in the landfill, but that's a lot of heat and fossil fuel gone for nothing.

Re:Good Thing (0)

Anonymous Coward | about 1 month ago | (#47583445)

I'm sure you spend 24/7 of your wakened time working on the betterment of humanity, such as curing cancer, resource capture and use (energy), materials science, space mining and other such industries.

Oh? You aren't? How expected.

Protip: a decentralized currency has more potential for a future economy than current abusive currencies do. (bitcoin doesn't, the others do, bitcoin itself is abusive)
So in a way, it could help considerably in time.

Re:Good Thing (1)

Viol8 (599362) | about 1 month ago | (#47583571)

"I'm sure you spend 24/7 of your wakened time working on the betterment of humanity, such as curing cancer, resource capture and use (energy), materials science, space mining and other such industries."

What a pathetic argument. You might as well say that only people who work in child abuse should find it distasteful. Get back under your bridge you pathetic troll.

Please answer me one question (4, Insightful)

Opportunist (166417) | about 1 month ago | (#47582929)

As far as I can judge, and please correct me if I am wrong, running a bitcoin mining farm isn't really something that ties up a lot of your time. I might be a bit naive, but... isn't it just "flip the switch and, well, wait"?

If it's not so, the next question is probably moot, but if it is: Why would anyone SELL bitcoin mining rigs instead of simply building them and getting rich themselves? To me the whole deal smells a bit like those crystal ball experts who tell you next weeks lottery numbers... why, if it works, don't they play themselves and get rich themselves?

Re:Please answer me one question (1)

maliqua (1316471) | about 1 month ago | (#47582939)

some do
some don't

i personally think that the ones that don't are just unwilling to gamble on an unstable 'currency'

Re:Please answer me one question (1)

CanHasDIY (1672858) | about 1 month ago | (#47583577)

i personally think that the ones that don't are just unwilling to gamble on an unstable 'currency'

Or they know it's yet another doomed-to-fail commodities market that favors the big players over everyone else.

Re:Please answer me one question (2)

Rinikusu (28164) | about 1 month ago | (#47582963)

The guys that made all the money during the San Francisco Gold Rush weren't the guys panning for gold, but the guys selling shovels and food. Same concept here. Why get out there and hope to "get lucky" on a completely unproven commodity when you can sell the equipment to the actual speculators? It's not just a matter of flipping a switch and waiting, btw, there's power consumption. A farm like in the article isn't running off house mains, generally speaking, not to mention the actual space, cooling, and probably a security system to make sure someone just doesn't come in and steal your shit (or defecate on everything because $DRUNK).

Please answer me one question (0)

Anonymous Coward | about 1 month ago | (#47582977)

The currency is volatile and it's a risky business mining Bitcoins. Companies that build the rigs and sell them shield themselves from this risk somewhat.

Re:Please answer me one question (0)

Anonymous Coward | about 1 month ago | (#47583061)

Just do what Butterfly labs did, 'sell' mining hardware and never deliver it and use it yourself for "testing".

Re:Please answer me one question (4, Interesting)

Solandri (704621) | about 1 month ago | (#47583133)

Selling bitcoin mining rigs is a guaranteed profit.

Mining bitcoins is a potential profit, potential loss. It all depends on what happens to the value of bitcoins. Your reasoning only works if the equipment seller is absolutely certain that bitcoins will hold their value. From what I gather, the vast majority of people don't think they will, but will happily sell equipment to those who do.

Re:Please answer me one question (0)

ShanghaiBill (739463) | about 1 month ago | (#47583315)

Your reasoning only works if the equipment seller is absolutely certain that bitcoins will hold their value.

The miners can sell the coins as soon as they are produced.

From what I gather, the vast majority of people don't think they will

Nonsense. If the "majority of people" think bitcoins are overvalued, then they would be shorting them, and the value would fall. The current price is the consensus price where buyers and sellers are balanced. If you think otherwise, and you are sure you are smarter than the market, you are welcome to get rich by shorting them. Good luck.

Re:Please answer me one question (1)

businessnerd (1009815) | about 1 month ago | (#47583943)

The miners can sell the coins as soon as they are produced.

Yes, but will they be selling those coins at a profit or a loss? It costs money to produce coins (equipment, electricity, physical space, etc.). Let's assume that when you begin mining, the the sale price of BTC will allow you to turn a profit. But as we have seen, the sale price of BTC can fluctuate wildly. If the price falls below your starting price, you will no longer be turning a profit, but be bleeding money.

If the "majority of people" think bitcoins are overvalued, then they would be shorting them, and the value would fall. The current price is the consensus price where buyers and sellers are balanced.

This statement assumes that everyone who knows what bitcoin is and has an opinion on it is actively participating in the bitcoin economy. This is untrue. The majority of people who don't think bitcoins will hold their value have chosen not to participate in the bitcoin economy at all and are investing elsewhere.

Re:Please answer me one question (1)

chispito (1870390) | about 1 month ago | (#47583979)

Selling bitcoin mining rigs is a guaranteed profit.

...assuming a guaranteed buyer.

Re:Please answer me one question (1)

ledow (319597) | about 1 month ago | (#47583143)

There's datacentre-level maintenance but otherwise, yes.

However, where you get rich is not in mining the coins for yourself - have you not seen the "mine your own bitcoins, just $X/month" adverts? You lease that crap out to people hoping to make a fast buck and/or hide their trail somewhat in converting currency to Bitcoins (sure, they bought a Bitcoin server - but which Bitcoin did they actually MINE? - it's quite difficult to trace if the hosting firm is willing to not keep traffic logs).

But then, there are multitude of companies that employ other companies to do things that they could do themselves, and pay for the full cost + that intermediary's profit in order to do so.

And when you have no customers? Well, you're not "losing" much on the business operation and always have a stock of "cash" coming in even with zero customers....

Re:Please answer me one question (1)

magarity (164372) | about 1 month ago | (#47583191)

Why would anyone SELL bitcoin mining rigs instead of simply building them and getting rich themselves?p>

It's right there in the opening phrase; this IS a case of someone who sells the systems using it themselves: "Bitcoin hardware vendor BitFury has opened ..."

Re:Please answer me one question (1)

bluefoxlucid (723572) | about 1 month ago | (#47583245)

Risk.

You can make a lot of money building up bitcoins. It may take a year to get your investment back, and then 3 years to get major profitability. You're going to essentially be rich as fuck in 10 years' time.

In 2 months, the bitcoin market might crash. This bubble has to pop some time. By cashing out the marginal value of your bitcoin mining rig now, you reap immediate guaranteed profits and transfer the risk of loss to the customer.

Miners vs. mining-equipment mfgrs (1)

davidwr (791652) | about 1 month ago | (#47583361)

Why would anyone SELL bitcoin mining rigs instead of simply building them and getting rich themselves?

There is less uncertainty and other risks in making and selling mining rigs than in mining.

Also, to "do it right," mining on a large scale requires some some BC-mining expertise that making equipment doesn't have. Granted, this "expertise" isn't very much (yet) - it amounts to things like legal compliance (where applicable - not very many places if any as of today but probably many places soon), whether you want to provide "washing/anonymizing" services and if so at what cost, what is the lowest transaction fee you are willing to accept under a given circumstance (e.g. if electricity costs less at night, you may be willing to take a lower fee), etc.

There is a parallel question in the real world with a parallel answer:
Why do people/companies that make oil-drilling rigs sell them instead of just using them to drill for oil themselves? Answer: Different risks and different areas of expertise. Oil exploration companies have or hire expertise in how to scout for possible deposits, how to negotiate mineral leases, how to operate oil rigs, how to handle legal compliance, etc. etc. - things that the rig-manufacturing companies would prefer not to do.

Re:Please answer me one question (1)

tnk1 (899206) | about 1 month ago | (#47583441)

Those who buy the rigs have money and business connections, but don't know how to build good rigs. Those who build them don't have money or connections, but plenty of experience making rigs.

Sometimes those two capabilities overlap, but there's a lot more investors out there than there are computer hardware experts.

Re:Please answer me one question (1)

tompaulco (629533) | about 1 month ago | (#47583631)

Why would anyone SELL bitcoin mining rigs instead of simply building them and getting rich themselves?

one might ask the same question of companies that sell industrial mining equipment.

Selling shovels to the guillible (1)

sjbe (173966) | about 1 month ago | (#47583765)

Why would anyone SELL bitcoin mining rigs instead of simply building them and getting rich themselves?

Same reason that people sell get rich quick schemes to the gullible rather than getting rich off the scheme themselves. They know there is no profit to be had in the actual mining of bitcoins but there is money to be had selling virtual shovels to those dumb enough to not figure this fact out.

If you really could make millions mining bitcoins why would you tell anyone?

Global Warming (0)

Anonymous Coward | about 1 month ago | (#47582943)

And causing global warming in the process.

Hold on here, boy! (1)

Anonymous Coward | about 1 month ago | (#47582989)

First of all, here in Georgia, we are a State [georgia.gov] in the US of Fucking A!

Secondly, what the fucking Hell does Athletic shoes have to do with Bitcoin? [asicsamerica.com]

YUO == FAIL IT! (1)

Thud457 (234763) | about 1 month ago | (#47583171)

A gen- U -ine redneck wouldn't know that Asics is a brand of athletic shoe.

They should have used these resources to research the Nine Million Names of God [alpha61.com] to immanentize the eschaton .

Re:Hold on here, boy! (1)

OzPeter (195038) | about 1 month ago | (#47583519)

First of all, here in Georgia, we are a State [georgia.gov] in the US of Fucking A!

Secondly, what the fucking Hell does Athletic shoes have to do with Bitcoin? [asicsamerica.com]

Pity that they are talking about the country in Eurasia and not the US state. Or that when the state of Georgia seceded from the US it referred to itself as the "Republic of Georgia".

Methinks you should pay more attention to the world around you.

Good and bad (0)

Anonymous Coward | about 1 month ago | (#47583043)

The good is that if enough different mutually-hostile groups mine en mass like this, it will prevent any one group or consortium from gaining enough BC (by percentage of BC in existence) to be able to easily manipulate the blockchain.

The bad news is that there is always the risk that enough of these groups will merge, cooperate, or be manipulated by an outside force (think government or mob influence) to disrupt the BC economy. Once trust in BC or any similar currency is disrupted in a way that can't be fixed by technical means, it may never be restored.

This is one reason (among many) that people should not hold BC as a long-term investment, as they might do with gold.*

Holding BC for same-day use, near-term (weeks, not months) use as a hedge against volatility, and perhaps even as as a short-term or if you are looking for a high-risk investment, medium-term (months or a few years) investment may be appropriate for some investors. But as a traditional investment I would strongly warn against buying BC with the intent of holding it for decades Buffett-style.

*While it's possible that some massively disruptive technology might devalue gold in the same way that aluminum was massively devalued in the 1800s by technological advances, it's not something I foresee in the next 20 years.

Waste of power (1)

Scottingham (2036128) | about 1 month ago | (#47583055)

What a colossal waste of power. Personally, I'd like to see a cryptocurrency where the production of the coins is directly related to the amount of energy produced by a particular source.

For example, a 3MW solar farm could produce N number of coins every day. But a 3GW nuclear plant could produce 3000N coins every day. This way the power can be still use productively but the currency is directly tied to the energy produced. So essentially it'd be a non-fiat currency based on the real world.

Re:Waste of power (1)

Yebyen (59663) | about 1 month ago | (#47583177)

"based on the real world" so, you mean, in fact completely unreal and made of unicorn dust.

How would you tie energy generation to coins? I'm assuming the point of your proposed solution is that the coins are a reward for generating energy, and producing the coins does not actually consume the power. So, how do you make it provably fair? Install ammeters at each generation site with embedded DRM protections?

Why not just sell the power?

Re:Waste of power (1)

Scottingham (2036128) | about 1 month ago | (#47583247)

Good points. The details are obviously scarce as I'm not sure of the best way to go about doing this. Something like the ammeters like you suggest is what I was envisioning.

As for not just selling the power...Ideally this scheme would be used to provide a basic income for those who do not have any money to start with. Sure, selling some of the power might help to provide a measure of viability. I'm thinking this would be a basis for a basic income that isn't completely detatched from reality. 'Based on the real world' means that the coins couldn't be created out of thin air like dollars.

Pie in the sky? Sure. I'm just a dude with visions of a world without slums made viable through abundant nuclear energy. Sigh...

Re:Waste of power (0)

Anonymous Coward | about 1 month ago | (#47583321)

There's no need to hack the meters to game the system. My hydro power plant produces 1 MW, and I donate all the generated power to my friend Joe who uses it to pump water to the top of the dam. Gimme my coins!

Re:Waste of power (1)

Scottingham (2036128) | about 1 month ago | (#47583383)

I would think a transparent and open process would go a long way to stop people from gaming the system. Of course it'd be an ongoing battle though. If the power were delivered in discrete chunks, say in large battery units or something, it'd be easier to keep track of and harder to hack.

This idea is a work in progress, but I haven't heard any serious show-stopping critiques yet.

Re:Waste of power (1)

jones_supa (887896) | about 1 month ago | (#47584063)

What a colossal waste of power.

The electricity that goes in Bitcoin mining is essentially converted to 100% heat. So the problem can be avoided every time when the heat can be utilized somehow, for example to warm up a house. Which is, of course, almost never. ;)

Fuck the USA (0)

Anonymous Coward | about 1 month ago | (#47583083)

Fuck the USA. Stop being the world police

Environmental ROI? (5, Interesting)

nickovs (115935) | about 1 month ago | (#47583109)

This begs the question whether mining for BitCoins is more damaging to the environment than mining for precious metals, for a given value of return. The EPA emissions factor [epa.gov] for electricity is about 0.69 tons of CO2 per megawatt hour, so producing the electricity used by this datacenter is, on average, dumping into the atmosphere 331 tons of CO2 per day or about 120,000 tons of CO2 per year. While there are many other forms of environmental damage from gold mining, a quick search suggest that the greenhouse emissions from gold extraction [eoearth.org] run to about 11.5 tons of CO2 equivalent per kg of Gold. At this rate 120,000 tons of CO2 yields of 10.5 tons of gold, worth nearly $500 million at today's price. Will this datacentre yield more than half a billion dollars worth of bit coins each year?

Re:Environmental ROI? (0)

Anonymous Coward | about 1 month ago | (#47583195)

Except you can't really power most precious metal mines with solar or wind. I doubt anyone is doing this but you could. Also it's very hard to compare the environmental impact of carbon being pumped into the atmosphere to a big god pit mine

Why not? (1)

davidwr (791652) | about 1 month ago | (#47583425)

Okay, I'll grant you that equipment that uses engines which require more power than today's electric engines of the same size can produce can't feasibly be done with wind or solar. Ditto for portable equipment where the size or weight of today's electric engines + batteries is more than the size or weight of the comparable non-electric engine.

But any mining equipment which could be run off of an electric engine and where the size or weight of an electric engine + batteries is acceptable could be run or recharged off of electric mains. The power on these mains can come from "green" sources, assuming of course that a "green" power plant exists or could be built close enough to attach to that region's power grid. That assumption may not hold in some non-developed countries.

Re:Environmental ROI? (1)

CanHasDIY (1672858) | about 1 month ago | (#47583607)

Except you can't really power most precious metal mines with solar or wind

Nor can you build a datacenter without a couple metric shit-tonnes of rare earth minerals.

Re:Environmental ROI? (2)

OzPeter (195038) | about 1 month ago | (#47583411)

The EPA emissions factor for electricity is about 0.69 tons of CO2 per megawatt hour, so producing the electricity used by this datacenter is, on average, dumping into the atmosphere 331 tons of CO2 per day or about 120,000 tons of CO2 per year

Given that the data center is in the Republic of Georgia [wikipedia.org] and not the US state of Georgia [wikipedia.org] I don't think that the EPA estimates really have any relevance. If anything the numbers are probably much much worse.

Re:Environmental ROI? (1)

angel'o'sphere (80593) | about 1 month ago | (#47583569)

Why should the numbers be "much much" worse?
Neither are the laws of physics different in the Republic of Georgia nor are the coal plants in the US state of Georgia known to be particular efficient.

Re:Environmental ROI? (0)

Anonymous Coward | about 1 month ago | (#47583491)

Check back next week to find out if Bitcoins exchange will be $1, or $1 trillion.

Re:Environmental ROI? (1)

Shatrat (855151) | about 1 month ago | (#47583495)

A) No it doesn't beg the question. http://en.wikipedia.org/wiki/B... [wikipedia.org]
B) Electricity in the Republic of Georgia is almost all Hydroelectric.

Re:Environmental ROI? (0)

Anonymous Coward | about 1 month ago | (#47583899)

So far, I've found four items of concern with your post.
1.
Your rate of 120,000 tons of CO2 are per year.
However, the 11.5 tons of CO2 is per kg of gold.
Hmm, comparing time (year) to substance (gold) may be a bit tricky, although I see you phrased an interesting question which might handle that right.

2.
If 1 kg of gold = 11.5 tons of CO2, and we're comparing to equal values of CO2, then for 120,000 tons of CO2 I get 120,000 / 11.5 = 10434.78 kg, which is 11.5 tons [google.com] of gold. (Potential for confusion here... 11.5 tons of CO2 and 11.5 tons of gold.) So when you said 10.5 tons of gold, somehow you're pocketing 1 ton of that gold.

Yeah, I know, posts always sound smarter when they've got a bunch of numbers thrown around. It's not like numbers are ever used to lie.
I'm not actually trying to accuse you of being dishonest, but, rather, a bit sloppy (unless I slipped somewhere).

3.
I also notice that the site on eoearth.org (where you got the 11.5 tons per kg of Gold) shows graphs, at 160px. The entire graph is only a puny 160 pixels tall. Although, the tiny graph is a hyperlink that you can click on to be brought to an image that is... 160px. Oh, that's no better. It's still a postage-stamp-sized graph on my monitor, and even if I was using a lower resolution to make the graph bigger and blurrier, that wouldn't make the details any more readable.
So that site makes it look like they have details available, for those who just casually scroll by or maybe even use their mouse to notice that something is a hyperlink. They make it look like they have nice details available to share. But if you try to actually see those details, they're actually not all that available.

Considering that the site eoearth.org is a website called "The Encycopedia of Earth", you would think that an encyclopedia wouldn't be trying to bury the details.

4. If the EPA.gov says electricity is 0.69 tons of CO2 per megawatt hour, I'm off-hand guessing that's spread out over a national average. If these guys are running a custom data center, and their goal is not to provide fast bandwidth for customers (or employees), then they are probably going to place that data center in a place with cheap electricity. That is likely to be a place where electricity is easy to make, and may be less wasteful than the American average. (I say American because EPA.gov is the Environmental Protection Agency of the United States. But this data center was stated to be in the Republic of Georgia.)

So, in a nut-shell, your impressive-looking numbers don't appear to necessarily be accurate for this situation.

What an absolutely outrageous waste of resources. (1)

MarkvW (1037596) | about 1 month ago | (#47583279)

Stupid.

hrm (0)

Anonymous Coward | about 1 month ago | (#47583301)

I love bitcoin but even I find these huge mining outfits disturbing.. even if using free energy all that hardware seems such a waste.

This shows why Republicans love... (0)

Anonymous Coward | about 1 month ago | (#47583349)

Bitcoins. They're horrible for their Earth, and their kind hates the Earth so they love them. Wasting 20 MWatts 24/7 for a fake conservative currency should be a crime. If our rulers weren't so biased against sensible laws, these people would be put in prison.

Please explain (0)

Anonymous Coward | about 1 month ago | (#47583389)

Help out a brother here who nodded off during most of his ECON101 class. What is the benefit or impact of the way bitcoins are created? If they are industrialized like this, how is this a good thing? Where does the distribution of wealth occur, or does it not (and is that a good or bad thing)? It seems you have a limited number of players who can print and hoard their own money because now it seems you need large resources to do it in any real sense. I look at it like mining some kind of mineral; sure everyone can go out in their back yard and maybe find some specs, but over yonder you have these large industrial companies strip-mining the tops off of the mountains; you end up with a few flakes and they end up with most, and I don't see how that is a good thing in the larger economy.

Fool's gold tulips. (0)

Anonymous Coward | about 1 month ago | (#47583463)

I think one does not need to spend 20 megawatt-hours on calculations to realize that whoever created Bitcoin, holds a secret backdoor or a magic word that can calculate all virtual "coins" near instantly. The elliptic crypto which underlines Bitcoin has very peculiar initiating values that were allegedly chosen in a random way. One has to be blonde-silly to belive such claims.

Investing dozens of millions of dollars in a "mining farm" and waking up one morning to news of a list of all possible bitcoins dumped by an anon onto Pastebin would be a bad morning.

Please donate (1)

ArcadeMan (2766669) | about 1 month ago | (#47583493)

Donate 1000 satoshi or more to my microwallet (17Yvsma9tfiuqVP7QhsFE2VmsFpTEMy17P). All donations will be used to pay for the time needed to write funny comments on Slashdot.

Great! (0)

Anonymous Coward | about 1 month ago | (#47583527)

Wasting even more electricity for something completely pointless.

ASIC is the real innovation (1)

zerosomething (1353609) | about 1 month ago | (#47583611)

Money (exchangeable value) has always driven innovation. The application-specific integrated circuits made just for Bitcoin math were rapidly developed and produced in mass quantities in multiple variations. All of this if about a 2 year span at most. These the ability to quickly design and produce ASIC chip is real innovation here and actually commodity. It won't be long now before we have ASIC for all kinds of number crunching and specific tasks. It's hardware that's innovating and changing nearly as fast as software. I bet on this as a new wave of tech. Multipurpose CPUs are likely going to become just small components in a much larger system replacing what we know as computers.

*Shakes head* (1)

Chas (5144) | about 1 month ago | (#47583679)

All this effort, resources and real money being flushed down the drain for imaginary currency.

Whoever ACTUALLY coined the phrase attributed to P.T. Barnum was off by a factor of measurement at least.

Re:*Shakes head* (1)

jones_supa (887896) | about 1 month ago | (#47583989)

The existence of Bitcoin still makes the world more interesting.

low budget? (1)

zeroryoko1974 (2634611) | about 1 month ago | (#47583685)

20 million dollar data center is low budget?

The real winners (1)

neo-mkrey (948389) | about 1 month ago | (#47584007)

are the utility companies.
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