As blockchain and cryptomining were starting, people were attempting to do the same in their garages and other ad-hoc locations with little thought to scaling or efficiency. But once those power costs started to add up, it was clear that they needed to relocate even if they did have to rent in a new space so the overall process could be better and cheaper. And to sweeten the deal, economic development teams have come up with incentive packages that include tax abatement for over a decade as well as develop training opportunities for future employees.
As blockchain has developed to support various cryptocurrencies, the technology and equipment to support has been developing as well. Bitmain, a Chinese-state backed company, manufacturers about 70% of all the air-cooled mining technology that so many miners have been using.
Blockchain was having an impact on the real estate around North America, primarily around cryptomining operations. With the mining operations being power intensive, the primary winners started to become the places with cheap power, such as central Washington state, Oregon, update New York and Canada. Cheap location became another quick factor, as the site in Rockdale, TX was largely empty and ready to accept any tenant at a lower rate than elsewhere in the state. The capacity of power was another draw to these locations; knowing that the power could be ramped to provide 50 MW and more meant they were ready for fast deployment.
In 2018 Bitmain pledged to invest $500 million in Rockdale, TX to develop a major data center and bitcoin mining hub. This was to be located at a former Alcoa smelter plant, with the expectation of creating approximately 400 jobs. This project, and a sister site in Phoenix, AZ, were put on hold as the prices, along with popularity and trustworthiness, of Bitcoin and other cryptocurrencies bounced up and down before settling at lower than expected rates.
Large scale cryptocurrency mining is a power-hungry proposition due to the high-performance chips performing trillions of computations per second, and therefore costly. Digiconomist reported that Bitcoin energy consumption is higher than 159 individual countries, and if they were their own country they would rank 61st in the world for energy use.
Along with that power is the need to cool the mining gear. Air cooling, even with cooler ambient climates, requires a lot of energy that takes away from the overall cryptocurrency bottom line. Instead, miners have turned to water cooling, using immersion technology or, like Bitmain has developed, use water-cooled equipment and rely on connecting to a more efficient, larger water-cooling system. As blockchain adoption ramps up, no matter how slowly, there will be changes to the data center environment to accommodate the growth, demand, and increase of density.