A look at the Blockchain’s Infrastructure…

And how the mining industry needs to innovate.

Mining is often overlooked in discussions about bitcoin, and it is constantly marginalized in the larger conversation now taking place around the potential of blockchain technology. But with a deeper look it becomes clear that the mining process is the foundational component of both the virtual currency and the underlying blockchain technology.

Mining has steadily improved, iterating through CPUs, GPUs, FPGAs, and now ASICs. Even ASIC technology today is on par with the industry’s latest and greatest. From 130nm to 16nm/14nm in less than three years.

ASIC manufacturers are taking advantage of new and old methods to develop efficient, high performance chips. But for mining manufacturers to stay ahead of the competition they are going to have to find additional ways of remaining innovative.

Mining manufacturers have raised the most money in the ecosystem. BitFury $60mm, 21 Inc $116mm, KnCminer $29mm; these companies are using capital to build the next generation of chip design and find advantages to lower their operational costs.

Miners are deploying creative (some seemingly risky) ways to reduce heat in their facilities. We have seen approaches with mineral oils, liquid cooling, giant fans, and some even use a misting technology. Many of these methods are already being experimented with in large data centers by the likes of Facebook’s, Amazon, Apple, and Google.

Most mining facilities are in cold, remote areas of the world which reduces operational costs like hardware maintenance, electricity, and infrastructure build outs. The downside is there are risks associated with operating in unknown countries, especially if you’re not a local privy to the laws in that region. Things like unreliable electrical and internet infrastructure; corrupt governments, unpredictable weather outages or damage, and unruly landlords are just a few to mention.