As Bitcoin mining has grown in popularity, many service providers offering hosted mining solutions have entered the market. Just like with regular web hosting, Bitcoin miner hosting comes in various forms, including shared, dedicated and cloud hosting.
After Bitcoin was introduced in 2009, other cryptocurrencies have also been developed and can be mined by users. Litecoin, Ethereum, Dash, Dogecoin and Ripple are just a few examples. As a result, many hosting providers offering Bitcoin miner hosting services also support mining various other cryptocurrencies. This gives users more choice and flexibility, as well as the ability to take advantage of the rising prices of some Bitcoin alternatives.
When Bitcoin was first introduced, it could be easily mined with a computer’s CPU and later GPU. But as more miners joined the network, the mining difficulty increased, which resulted in the development of specialized hardware that is dedicated to mining Bitcoin. Mining hardware for cryptocurrencies that use a different algorithm, such as Litecoin, have also been created and are often sold by the same companies making Bitcoin miners.
Antminers are now one of the most popular types of cryptocurrency mining hardware. While they’re generally of high quality and efficient at doing their job, installing miners at home can cause a variety of problems for users. As the miners are performing highly complex calculations whenever they’re used to mine a crypto coin, the chips inside them that do the actual processing work at full capacity. This generates a lot of heat, which the miner’s fans will have to dissipate, creating a lot of noise. Another problem is that having several miners running around the clock will also use a lot of electricity, which can affect the profitability of a mining operation.
As a result of these issues, many individuals and companies involved in cryptocurrency mining have began looking for a solution to host mining hardware off-premises.
Bitcoin Miner Colocation Services
Colocation hosting is a service that allows the client to lease rack space, bandwidth and power in a datacenter. Unlike with other hosting services, the client is responsible for providing their own hardware, such as servers, routers and switches.
While finding a colocation provider for a regular server isn’t difficult, locating one that is willing to work with cryptocurrency miners can be a lot more challenging. Bitcoin mining hardware uses a lot more power and generates more heat when compared to other types of computing hardware, like servers used to host online applications and websites. As a result, many of the top datacenter providers, such as Equinix, TierPoint and Digital Realty are either completely unwilling to colocate space to Bitcoin mining hardware or charge very high prices that result in making a mining operation unprofitable.
This doesn’t mean that it’s impossible to find colocation for Antminers. Several entrepreneurs have started datacenters that exclusively host cryptocurrency mining gear. The most popular ones in the US are located in the states of Oregon or Washington, as they have a relatively mild and stable climate, combined with cheaper electricity when compared to the rest of the nation. AsicSpace and Bitcoin Asic Hosting are two examples of datacenters that exclusively host mining hardware.
As the price of Bitcoin mining and the coins have risen significantly during the past few months, many individuals have decided to invest in mining hardware and are looking for a colocation facility that can host their gear at an affordable price. As a result, the availability of colocation space at dedicated datacenters is rather limited. Industry experts are expecting that several new colocation facilities for Bitcoin mining hardware will open up in Washington during the next few months.
There are also some traditional Bitcoin mining data centers spread out throughout the US and Canada, which are willing to lease out some of the space they have sitting idle to Bitcoin miners, as opposed to just letting it sit idle. While prices vary due to supply and demand, these providers offer reasonable prices based on the amount of electricity that a miner consumes. Many Bitcoin miner colocation service providers are also willing to give discounts to enterprise clients who host 20 or more miners in their facilities.