AI
Saturday, April 26, 2014 10:54:03 PM
The Other Bitcoin Power Struggle
By Jason Clenfield and Pavel Alpeyev April 24, 2014
There have been a few get-rich-quick stories among the Bitcoin “miners,” who use stacks of powerful computers to solve complex math problems used to create the virtual currency. The trouble is, crunching those numbers takes a tremendous amount of energy. Fred Trotter, a co-founder of data journal and software company Not Only Dev, estimates that in the five years Bitcoins have existed, machines dedicated to mining them have consumed 150,000 megawatt-hours of electricity—enough to keep the Eiffel Tower lit for more than two and a half centuries.
---
260
Years the Eiffel Tower could stay lit with the energy used to mine Bitcoins since ’09
---
To ensure they can turn a profit, Bitcoin miners are scouring the globe for the cheapest power, from sleepy rural towns in America’s Pacific Northwest to the shadows of volcanoes in Iceland, where a few enthusiasts have built one of the world’s largest Bitcoin mining collectives using low-cost geothermal energy. When power costs are high, it becomes a lot tougher to justify mining Bitcoins, says Alex Wilhelm, a miner and software engineer living in Tokyo. “If the electricity price goes up, the math stops working,” he says.
Wilhelm doesn’t keep his modest 30-server mining operation, which he estimates will earn $12,500 this year, in Japan. Instead it’s sitting halfway around the world in the tiny Austrian village of Tattendorf, where Wilhelm grew up. He gets electricity there free from his father’s power plant, a water-driven turbine housed in a two-century-old brick building that has been in the family for at least six generations and once powered the entire village. From Tokyo, Wilhelm manages his Austrian server farm over the Internet, with video cameras that give him a look at the rows of circuit boards hanging like bats from metal racks inside the cavernous stone room where he used to play.
Story: Bitcoin Mining Chips, a High-Tech Arms Race
http://www.businessweek.com/articles/2013-11-14/2014-outlook-bitcoin-mining-chips-a-high-tech-arms-race
In his Tokyo apartment, Wilhelm pulls up the Bitcoin calculator on the website CoinWarz to show why his server farm isn’t located at home. The setup burns 10 kilowatts, and electricity in Tokyo costs about 25¢ per kilowatt-hour, among the most expensive rates in the world. He estimates that he’d lose about $13 per day on Bitcoin mining there, after the $70 in daily power charges. It’s also nice not to have to deal with the noise: The fans that cool his Bitcoin servers run so loudly that when he switches on his audio feed, the noise from the speakers is a little like standing under a waterfall. “You can imagine if you have something like this at home, your wife won’t be very happy,” Wilhelm says. “It’s just loud, and it’s hot, and it’s expensive.”
Photographs by Yuriko Nakao/Bloomberg; Courtesy of Wilhelm family (2)
Not everyone has a power plant in the family. Robert Van Kirk, who co-founded a company called MyRigSpace.com that hosts other people’s mining gear in an old Portland (Ore.) server farm, is comparison shopping. He and partner Damir Kalinkin aren’t satisfied with paying 5 cents per kilowatt-hour there, even though it’s about half the U.S. average. Van Kirk says they’re planning to move to Moses Lake, Wash., a quiet town with more cows than people and the second-lowest electricity rates in the U.S., after Minot, N.D. Each kilowatt-hour there costs 1.7¢, making Moses Lake a destination for Bitcoin miners. “I called a real estate agent, and I told them we need a location with a lot of electricity,” Van Kirk says. “He said to me, ‘Oh, are you guys involved in Bitcoin?’?”
Bitcoin’s biggest problem lately has been stability. The February disappearance of more than $500 million worth of Bitcoins from Tokyo-based Mount Gox, one of the biggest exchanges, has given the virtual currency a black eye. But power consumption has always been a primary issue, says cryptographer Philipp Gühring, who co-authored a 2011 paper on energy’s role in virtual mining. “Yes, you need the hardware, and you need the software, but electricity is the core thing that drives Bitcoin,” he says. Even some of the technology’s supporters say the focus on bigger, better, power-hungrier mining equipment has become a wasteful arms race. “The network would operate just fine with only 1 percent of the current computing muscle devoted to it,” Trotter says. “It’s consuming resources that should be allocated differently.”
Graphic: Interactive Demonstration: This Is How You Mine Some Bitcoin
http://www.businessweek.com/articles/2014-01-13/interactive-simulation-how-to-mine-bitcoin
Wilhelm is betting his low-cost mining will pay off. He says he and his father worry they’ll have to close the Tattendorf power plant when energy subsidies run out in 2016. They may be able to keep it open, he says, with a successful Bitcoin operation—if the virtual currency repeats its performance from last year, when it shot from $13 apiece to around $1,100. (As of April 23, the price was hovering around $487.) “It all depends on the value of Bitcoin,” Wilhelm says. “If you’re mining at this stage?…?you’re doing it because you believe it will go up.”
Story: A Possibly Useless Guide to Pillaging the Bitcoin Mine
http://www.businessweek.com/articles/2013-11-07/a-possibly-useless-guide-to-pillaging-the-bitcoin-mine
The bottom line: Bitcoin miners are seeking energy prices low enough to keep their server farms profitable.
Clenfield is a reporter for Bloomberg News in Tokyo.
Alpeyev is a reporter for Bloomberg News in Tokyo.
http://www.businessweek.com/articles/2014-04-24/bitcoin-miners-seek-cheap-electricity-to-eke-out-a-profit
====
Samsung Galaxy Explosion: 5 Times That Galaxy Devices Have Spontaneously Combusted
http://www.ibtimes.com/samsung-galaxy-explosion-5-times-galaxy-devices-have-spontaneously-combusted-1342747
.. gee, Samsung is a bit of an explosive device ..
====
The Bitcoin Debit Card Will Surely Not Go Horribly Wrong
By Dan Seitz / 04.25.14
Xapo
One of the problems of Bitcoin, beyond the fact that exchanges can melt into slag at warp speed .. http://uproxx.com/technology/2014/02/bitcoin-implosion-continues-mt-gox-files-bankruptcy/ , is that it’s actually kind of hard to spend it compared to actual money. This is mostly due to the fact that it’s pretty hard to turn it into actual money. But, of course, a Bitcoin debit card that sounds almost absurdly shady will be perfect and not end in tears!
Yep, it’s happening. Or at least Xapo, a Bitcoin storage bank, is claiming that it is .. http://blog.xapo.com/post/83436492784/announcing-the-xapo-debit-card . And actually, it’s not a terrible idea in some respects:
---
Xapo Debit functions like a traditional debit card and is a big step forward in the development of the bitcoin infrastructure – for the first time, customers have the ability to use bitcoin at any online or offline merchant that accepts debit or credit cards. This makes it easy for users to pay with bitcoins in real-time and makes it seamless for merchants to accept payment. After a customer makes a payment using bitcoin, the merchant will receive the funds in their local currency.
---
This works about how you’d expect: You have a set number of Bitcoin in your digital wallet. You swipe the card, and the bank backing the card sells off the amount of Bitcoin necessary to cover your purchase. One teeny, tiny problem: It turns out Xapo, despite claiming to have cut a deal with MasterCard, turns out to have no relationship with the company .. http://gigaom.com/2014/04/24/a-debit-card-for-bitcoin-xapo-solves-the-payment-problem-with-mastercard-tie-in/ .
Also notably missing from this Utopian ideal is what fees you’re going to pay, because there’s no way in hell Xapo and whichever bank it winds up working with isn’t going to make users pay for the convenience. Similarly, considering the tendency of Bitcoin to whipsaw wildly in value .. http://uproxx.com/technology/2013/04/bitcoin-surprises-nobody-by-being-insanely-volatile/ , there’s a very real chance that you might not be able to cover some purchases.
All that said, though, this isn’t the worst idea. In particular, anybody who’s been overseas and struggled with currency conversion can see the value in buying some Bitcoins and just using this as a sort of prepaid debit card. Still, Xapo is going to have to cough up some more details before this makes any sense.
http://uproxx.com/technology/2014/04/the-bitcoin-debit-card-will-surely-not-go-horribly-wrong/
.. nope, i'm not suggesting Bitcoin will be as successful as Samsung, just that just now i saw the Samsung upsets online first ..
By Jason Clenfield and Pavel Alpeyev April 24, 2014
There have been a few get-rich-quick stories among the Bitcoin “miners,” who use stacks of powerful computers to solve complex math problems used to create the virtual currency. The trouble is, crunching those numbers takes a tremendous amount of energy. Fred Trotter, a co-founder of data journal and software company Not Only Dev, estimates that in the five years Bitcoins have existed, machines dedicated to mining them have consumed 150,000 megawatt-hours of electricity—enough to keep the Eiffel Tower lit for more than two and a half centuries.
---
260
Years the Eiffel Tower could stay lit with the energy used to mine Bitcoins since ’09
---
To ensure they can turn a profit, Bitcoin miners are scouring the globe for the cheapest power, from sleepy rural towns in America’s Pacific Northwest to the shadows of volcanoes in Iceland, where a few enthusiasts have built one of the world’s largest Bitcoin mining collectives using low-cost geothermal energy. When power costs are high, it becomes a lot tougher to justify mining Bitcoins, says Alex Wilhelm, a miner and software engineer living in Tokyo. “If the electricity price goes up, the math stops working,” he says.
Wilhelm doesn’t keep his modest 30-server mining operation, which he estimates will earn $12,500 this year, in Japan. Instead it’s sitting halfway around the world in the tiny Austrian village of Tattendorf, where Wilhelm grew up. He gets electricity there free from his father’s power plant, a water-driven turbine housed in a two-century-old brick building that has been in the family for at least six generations and once powered the entire village. From Tokyo, Wilhelm manages his Austrian server farm over the Internet, with video cameras that give him a look at the rows of circuit boards hanging like bats from metal racks inside the cavernous stone room where he used to play.
Story: Bitcoin Mining Chips, a High-Tech Arms Race
http://www.businessweek.com/articles/2013-11-14/2014-outlook-bitcoin-mining-chips-a-high-tech-arms-race
In his Tokyo apartment, Wilhelm pulls up the Bitcoin calculator on the website CoinWarz to show why his server farm isn’t located at home. The setup burns 10 kilowatts, and electricity in Tokyo costs about 25¢ per kilowatt-hour, among the most expensive rates in the world. He estimates that he’d lose about $13 per day on Bitcoin mining there, after the $70 in daily power charges. It’s also nice not to have to deal with the noise: The fans that cool his Bitcoin servers run so loudly that when he switches on his audio feed, the noise from the speakers is a little like standing under a waterfall. “You can imagine if you have something like this at home, your wife won’t be very happy,” Wilhelm says. “It’s just loud, and it’s hot, and it’s expensive.”
Photographs by Yuriko Nakao/Bloomberg; Courtesy of Wilhelm family (2)
Not everyone has a power plant in the family. Robert Van Kirk, who co-founded a company called MyRigSpace.com that hosts other people’s mining gear in an old Portland (Ore.) server farm, is comparison shopping. He and partner Damir Kalinkin aren’t satisfied with paying 5 cents per kilowatt-hour there, even though it’s about half the U.S. average. Van Kirk says they’re planning to move to Moses Lake, Wash., a quiet town with more cows than people and the second-lowest electricity rates in the U.S., after Minot, N.D. Each kilowatt-hour there costs 1.7¢, making Moses Lake a destination for Bitcoin miners. “I called a real estate agent, and I told them we need a location with a lot of electricity,” Van Kirk says. “He said to me, ‘Oh, are you guys involved in Bitcoin?’?”
Bitcoin’s biggest problem lately has been stability. The February disappearance of more than $500 million worth of Bitcoins from Tokyo-based Mount Gox, one of the biggest exchanges, has given the virtual currency a black eye. But power consumption has always been a primary issue, says cryptographer Philipp Gühring, who co-authored a 2011 paper on energy’s role in virtual mining. “Yes, you need the hardware, and you need the software, but electricity is the core thing that drives Bitcoin,” he says. Even some of the technology’s supporters say the focus on bigger, better, power-hungrier mining equipment has become a wasteful arms race. “The network would operate just fine with only 1 percent of the current computing muscle devoted to it,” Trotter says. “It’s consuming resources that should be allocated differently.”
Graphic: Interactive Demonstration: This Is How You Mine Some Bitcoin
http://www.businessweek.com/articles/2014-01-13/interactive-simulation-how-to-mine-bitcoin
Wilhelm is betting his low-cost mining will pay off. He says he and his father worry they’ll have to close the Tattendorf power plant when energy subsidies run out in 2016. They may be able to keep it open, he says, with a successful Bitcoin operation—if the virtual currency repeats its performance from last year, when it shot from $13 apiece to around $1,100. (As of April 23, the price was hovering around $487.) “It all depends on the value of Bitcoin,” Wilhelm says. “If you’re mining at this stage?…?you’re doing it because you believe it will go up.”
Story: A Possibly Useless Guide to Pillaging the Bitcoin Mine
http://www.businessweek.com/articles/2013-11-07/a-possibly-useless-guide-to-pillaging-the-bitcoin-mine
The bottom line: Bitcoin miners are seeking energy prices low enough to keep their server farms profitable.
Clenfield is a reporter for Bloomberg News in Tokyo.
Alpeyev is a reporter for Bloomberg News in Tokyo.
http://www.businessweek.com/articles/2014-04-24/bitcoin-miners-seek-cheap-electricity-to-eke-out-a-profit
====
Samsung Galaxy Explosion: 5 Times That Galaxy Devices Have Spontaneously Combusted
http://www.ibtimes.com/samsung-galaxy-explosion-5-times-galaxy-devices-have-spontaneously-combusted-1342747
.. gee, Samsung is a bit of an explosive device ..
====
The Bitcoin Debit Card Will Surely Not Go Horribly Wrong
By Dan Seitz / 04.25.14
Xapo
One of the problems of Bitcoin, beyond the fact that exchanges can melt into slag at warp speed .. http://uproxx.com/technology/2014/02/bitcoin-implosion-continues-mt-gox-files-bankruptcy/ , is that it’s actually kind of hard to spend it compared to actual money. This is mostly due to the fact that it’s pretty hard to turn it into actual money. But, of course, a Bitcoin debit card that sounds almost absurdly shady will be perfect and not end in tears!
Yep, it’s happening. Or at least Xapo, a Bitcoin storage bank, is claiming that it is .. http://blog.xapo.com/post/83436492784/announcing-the-xapo-debit-card . And actually, it’s not a terrible idea in some respects:
---
Xapo Debit functions like a traditional debit card and is a big step forward in the development of the bitcoin infrastructure – for the first time, customers have the ability to use bitcoin at any online or offline merchant that accepts debit or credit cards. This makes it easy for users to pay with bitcoins in real-time and makes it seamless for merchants to accept payment. After a customer makes a payment using bitcoin, the merchant will receive the funds in their local currency.
---
This works about how you’d expect: You have a set number of Bitcoin in your digital wallet. You swipe the card, and the bank backing the card sells off the amount of Bitcoin necessary to cover your purchase. One teeny, tiny problem: It turns out Xapo, despite claiming to have cut a deal with MasterCard, turns out to have no relationship with the company .. http://gigaom.com/2014/04/24/a-debit-card-for-bitcoin-xapo-solves-the-payment-problem-with-mastercard-tie-in/ .
Also notably missing from this Utopian ideal is what fees you’re going to pay, because there’s no way in hell Xapo and whichever bank it winds up working with isn’t going to make users pay for the convenience. Similarly, considering the tendency of Bitcoin to whipsaw wildly in value .. http://uproxx.com/technology/2013/04/bitcoin-surprises-nobody-by-being-insanely-volatile/ , there’s a very real chance that you might not be able to cover some purchases.
All that said, though, this isn’t the worst idea. In particular, anybody who’s been overseas and struggled with currency conversion can see the value in buying some Bitcoins and just using this as a sort of prepaid debit card. Still, Xapo is going to have to cough up some more details before this makes any sense.
http://uproxx.com/technology/2014/04/the-bitcoin-debit-card-will-surely-not-go-horribly-wrong/
.. nope, i'm not suggesting Bitcoin will be as successful as Samsung, just that just now i saw the Samsung upsets online first ..
It was Plato who said, “He, O men, is the wisest, who like Socrates, knows that his wisdom is in truth worth nothing”
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