Tag Archives: Bitcoin mining

Follow the cold data center model?

One of the interesting things that came out of an interview I did with the Wall Street Journal was that someone else, in this case Michael Casey, picked up on something that few do – there is another operations model that most companies don’t consider when thinking about a data center strategy – especially for the upper realm of power (and cooling) densities which is a ‘follow the cold’ model.

What we discussed was the problem that Bitcoin Mining companies will have in the Northern Hemisphere as summer approaches – more heat. Mining is great when it’s cold out because a rig can help heat 1,000 square feet. So you’re making Bitcoin AND heating your living space and getting a double benefit because what you are paying for electricity to mine will also cover heating costs because the rig is turning electricity into heat just like any other computer. Now that winter is over in the Northern Hemisphere and Summer is on the way, that formula isn’t very attractive.

That same electricity that is making Bitcoin is now a liability because the last thing you want is more heat when it’s 100 degrees outside already. So you need to pay for electricity to cool your living space AND to make sure the rig doesn’t get wonky because it goes outside its operating temperature. You’re paying double for power to do the same thing. So how does a miner normalize things?

One simple and pretty basic way to do it is to follow the cold. Ship rigs to a place in the Southern Hemisphere and plug them in so you get the heat benefit when the climate is ideal for it. The things to figure out will be cost of electricity, any language barrier issues, and security of the facility and/or the operator. You don’t want to ship an expensive rig or handful of rigs to a place that sells them out the back of their remote mountain top hideaway because he doesn’t have electricity to begin with.

I still think the way to mine, and make money, is to only do it at scale and move off of air cooling. It’s too expensive when you run hot machines. Look at liquid cooling like the solution from Allied Control that has already deployed it for a mining operation in a challenging environment – Hong Kong. Then you can stay put, mine, and make money – as tempting as shipping your rig to an exotic cold spot for the Winter down under might be…

 

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The Summer of Bitcoin – Hotter Than You Think

Last week I had the opportunity to spend some time with the folks at Allied Control to talk about immersion cooling some more, the impact to Bitcoin and ultimately the impact on computing globally. One of the interesting things we discussed was what was just starting to be FELT by miners and data center operators – the heat problem.

You see, when Bitcoin mining started getting a lot of press mentions (before MtGox, Silk Road, and the other tabloid-esque stories), and was starting to take off, it was October of 2013. That was 6 months ago. Since then the hash rate has grown 46 TIMES. Not 46 percent, but 46 TIMES in just six months. That is a lot of hardware being built and shipped to support the growth of something that is still being defined as often as it is reviled but still has grown faster than anything else in the past 5 years. Given that level of growth, which by the way isn’t sustainable, there will be some plateaus, cliffs, and other negative trends that will impact the Bitcoin ecosystem. The most worrisome is heat.

The reason heat is so worrisome is because heat is a cancer on the roots of the ecosystem.

Heat eats away at profits in the form of cooling costs, it spreads as the Bitcoin ecosystem spreads, and if not dealt with aggressively, it may not kill the ecosystem but it will kill a lot of the ecosystem’s food chain because it takes more money to cool the rigs than the rigs can make mining. The more hardware put into service adds more heat to the ecosystem. Dealing with the amount of heat put into the ecosystem is breathtakingly inefficient today, and the density of most computer equipment is 10X less than a Bitcoin rig. One 4U Bitcoin rig generates 2.5 Kw. That was the electrical footprint of an entire 42U cabinet just a few years ago. Maximizing the number of rigs that fit into a 42U cabinet is 10 rigs and draws 25 Kw per cabinet. And unlike computer equipment that ebbs and flows with elastic traffic, workloads and users, Bitcoin rigs get turned on and they go. All gas, no brake until they get replaced. So you pay to cool 25 Kw per cabinet equivalent the moment you plug the rigs in and turn them on.

Going to a data center company to host your rigs is an expensive proposition. The cooling systems in most data centers that are older than 3 years (99% of them) cannot effectively cool that concentration of heat effectively. Even modern facilities can cool it, but a premium. Want to mine in the cloud? Forget it. We talked to an animation/CGI company a year ago and they build their own data centers because going to the cloud meant a 900% increase in cost for 30 Kw cabinets, and most of that was the cost of spreading out the horsepower used by those 30 Kw cabinets to too many cloud servers. Why? Heat. The 30Kw cabinets run really hot.

It is like trying to blow into the nozzle on a heat gun to keep your face from burning at that density.

So Bitcoin mining is not the only business where heat is an issue, but they are the newest, and least experienced. Bitcoin has largely grown up in the company of cowboys and 20-30 somethings mining on a rig that also doubled as a heater this winter, which was an efficient use of electricity. Since computers turn electricity into heat, if you are going to run a rig and get the extra benefit of heat along with Bitcoin, then it’s like mining Bitcoin and getting heat as a bonus. Now that these folks need air conditioning to keep their apartment cool, the added heat from a mining rig makes it VERY expensive to mine because electricity is now needed to cool the room and the rig, and the rig is adding heat on top of the heat and humidity that comes with summer, and you pay for the electricity to mine and to stay cool, so you double down, or in business speak, double your costs which will be variable based on climate. That’s a lot of risk added to a risky business.

The issue with cooling technology to date is air is nearing the end of its useful life. Air cooling got us to where we are 30 years after the first data centers were built to deliver 25 watts per square foot and cool it effectively. We are WAY past that today. In fact 3 years ago, you were boasting saying you built a facility to 250 watts/foot, and even that is not dense enough for Bitcoin. Every high density facility will tell you they can cool a Bitcoin footprint, but tell them you want to put 400 racks in a 10,000 square foot room, with an average rack density of 25 Kw that will draw that 24x7x365 from the money you light that rack, and see how they respond.

You are asking them to put 10 Megawatts in  what has traditionally been a 2.5 Megawatt space and cool something that is 400% hotter than their best design can handle. And that is just for the rigs that will ship in the next 90 days. So yes, Virginia you can cool Bitcoin rigs with air cooled systems, however not at a cost that is palatable for the operator or the mining pool, or even worth it today. Using air cooling will make it virtually impossible to make money mining – the chips in the rigs are too hot to be cooled with air.

So we need another technology better than air- liquid cooling.

There are two types that  have emerged as solutions in the market – one is oil and the other is manufactured fluid, like Novec from 3M. In a data center application oil is messy. It clings to boards, it drips, it gets on and soaks into anything that it comes into contact with. In videos I have seen touting its awesomeness, I cannot see a server tech wanting to put on gloves to go add a server to an oil tank. The other things I saw in the videos were the fact that the tanks were on raised floor and CRACS were in the background. Why cool the ambient air with air conditioners? Someone is paying for that no matter how much you are saving. The other issue with oil is that you still need to leave the heat sinks on the boards, and periodically take them out and scrape the paste buildup off of the heat sinks, and then put them back using NanoFoil and so the whole process is time consuming, messy and expensive.

The Novec liquid immersion cooling solutions, like the Immersion-2 option from Allied Control, I think holds the most promise. The liquid rolls off the boards and they come out dry. No dripping on my shoes, the floor, or ruining my clothes. It does not require a massive chiller plant to make it work, the cooling can be dialed up or down to cool whatever density gets thrown at it. It’s non-toxic. A tank is a tank, so as densities increase, the method of cooling remains constant, as does the equipment, solution and operational tasks associated with the new method. Once you go liquid, there is one system to learn and it’s low maintenance and you can fit 200 boards in a 42U equivalent cabinet. That is density air cooling and cabinets can’t manage effectively.

I think the headwind ALL of the liquid/immersion cooling solutions will have is with hardware manufacturers. Using liquid cooling negates the need for fans, cases, and cables for the components inside the box. That cost is stripped out, and while logically it makes sense to want to lower costs, if those costs translate to margins then it slows adoption. The perception is that the hardware manufacturer loses money. The reality is that the hardware manufacturer can maintain price because a customer’s perception that they are paying more for a stripped down model with no case, etc. is quickly smashed when they get their first data center bill and it is 50% less to run more powerful gear. I am willing to bet that the hardware manufacturers that want an integrated stack which consists of their lowest cost/highest performance hardware, in an environment that is free to cool their hardware in will win out. Or the cloud provider that wants to cool their more powerful hardware without paying for the electricity to do it that gives them a competitive advantage over EVERY other cloud provider because the others will be paying for electricity to move air around their data centers – on top of the cost of the chillers, piping, CRACs and CRAHs needed to do it.

So as things get hotter for Bitcoin, it will drive more of them to find a cost effective solution to cool their hardware that gets hotter and hotter, because paying for the power required to cool a rig is going up along with the temperatures. Summer is coming and it’s getting hotter already…

Stay cool, and look at liquid cooling.

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The Math of Bitcoin III

Blunt Hammer has been looking at and working through the math of Bitcoin as it relates to data centers over the past several weeks and the more we dig, the more we see Bitcoin working the way it should and also how there are several cracks in the system. Many news stories, especially the one by Newsweek trying to relaunch itself – apparently into oblivion – have added more stories about Bitcoin that are for the ‘standing in the checkout line’ crowd vs. people who want to understand its potential as currency for their business.

‘The Face of Bitcoin’ story threw the media into a frenzy because they thought there was finally a man, one human, who was allegedly behind it and would have answers. It reminded me of the running segment in Forrest Gump when reporters are running next to him with cameras asking him why he does it, and people thinking he was some kind of messiah or had answers. Nope. Newsweek got Gumped. The math analogy here is Bitcoin = 1, Newsweek =0. In fact, had Newsweek done even some basic research they would have found what I did – a link to a bunch of quotes from Satoshi Nakamoto going back to January of 2009. More than 5 years ago. Take a look and you may see as I did, the guy created something, opened it up to a community of other smart people and left it to go do something else not knowing if what he had created would have the impact or value it does today.

The real math I was doing however in spite of the riveting OJ-esque white bronco chase was related to the additional load the Bitcoin and crypto mining in general will add to the current electrical system worldwide. The rigs have the same electrical draw of an entire 42 U cabinet. In 4u of space. The rigs are chips and fans, a board, and case. The power supplies don’t ship with most of them, so like we used to say – batteries not included. So data centers where 2.5 KW were taken up by entire cabinets, now will have that inventory sucked up by something 1/10th the size. Said another way – it’s a 10x rise in density. That is an incredible amount of heat to add to a data center, especially ones that can’t handle a 2-3x increase from 2.5 up to 10 Kw/cabinet

Satoshi Nakamoto posted this on Aug. 9, 2010: ‘If you’re using electric heat where you live, then your computer’s heat isn’t a waste. It’s equal cost if you generate the heat with your computer. If you have other cheaper heating than electric, then the waste is only the difference in cost. If it’s summer and you’re using A/C, then it’s twice. Bitcoin generation should end up where it’s cheapest. Maybe that will be in cold climates where there’s electric heat, where it would be essentially free.’

Satoshi knew that heat was the issue four years ago when rigs were no where near the power they are today. In fact the hash rate was at 3GH back in August when he made that statement, and now it is at 40.8 MILLION GH! The computing power and electricity required to sustain and grow the hash rate is the Achilles heel of the entire network’s profitability because of the heat. When we use A/C to manage it, the cost of Bitcoin production doubles, and that doesn’t take into account any efficiency factors in a data center. As we have said many times, computers turn electricity into heat which is great if you live above the Arctic Circle 12 months a year, however for most of civilization that is not the case and A/C will be used to manage the heat that is produced from mining rigs. If the power costs are higher than the ability to make money making Bitcoin, there is no profit.

Here is a real world example of costs for a 1.0 MW Bitcoin mining operation:

1 MW IT load = 1,000 Kw

Cost per Kw (rent) = $100/kw 

Cooling ‘uplift’ = 50% (assumes a PUE of 1.5) 

Cost of power = .10 per Kwh

1,000 Kw (load) * 730 (hours in a month) * .1 (price per Kwh) = $73,000 for IT load power. Add 50% for cooling

Power =$109,000 per month at full load plus $100,000/rent = $209,000 per month = $2,514,000 per year for a 1 MW mining operation.

 As hash rates go up and the math gets harder and reinvestment in faster rigs is required just to keep up, you MUST eliminate costs of mining, which is all about managing power costs. Cut power costs, find efficient ways of cooling, and buy the most efficient rigs you can find. This is an arms race for the next 16 years, and you cannot bring bullets to gunfights.

If you want us to help you model out a successful mining approach of your own, email mark AT blunthammer.com. We are working on several game changing technologies…

 

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