Seattle, WA, February 18, 2014 – At the Washington Technology Industry Association (WTIA)’s latest Tech in Focus event in partnership with Wowrack Technologies at Sabey Data Centers in Tukwila, WA, three experts explained how the booming Bitcoin mining industry — even in its infancy – has created a technological imperative that has forced investors and speculators in digital currency to increase the scale of their operations from desktop computer “rigs,” to powerful, purpose built computers running in the mission-critical environments provided by data centers.
“We are not even at the ground floor for this technology,” Jinyoung Lee Englund, director of Public Affairs at the Bitcoin Foundation, told the audience.
Bitcoin is an invisible, digital unit of value that individuals can use to pay each other directly, without a middle man such as a bank. It is decentralized, open sourced network that is policed by millions of Bitcoin miners throughout the world who keep an automated ledger of every transaction. The ledger can electronically detect and prevent fraud because all parties are constantly “watching” each other’s operations. As a reward for administrating the system, miners receive Bitcoins that are dispensed by the system.
“With Bitcoin there is no bank to call,” said Ashok Misra, one of the three panelists, an expert on e-commerce and founder of Alina Consultants.
It is also a rapidly growing, but volatile, currency. The value of one Bitcoin jumped from $13.30 last December to $675 a year later, according to the foundation’s blog. At one recent peak, Bitcoins were valued at $1,100 each.
As with any revolutionary technology that offers the potential to disrupt institutions like banks and national currency regulators – with complete anonymity — Bitcoin has come under intense scrutiny by law enforcement agencies. Several high profile arrests have been made amid allegations of money laundering via dollars-to-Bitcoin exchanges and arranging illegal sales of firearms and drugs.
Nonetheless, the industry is booming and it is intensely competitive. Mining now involves a prodigious amount of data processing. In a process called “hashing, “miners compete to perform complex algorithms 24 hours a day. If they come up with the right answers before competitors do, they win a block of 25 new Bitcoins from the virtual currency’s decentralized network.
The system’s anonymous creator (or group of programmers) known only as Satoshi Nakamoto, set up the system so that no more Bitcoins will be created after 2140. It also capped the total amount of Bitcoins at 21 million. And, Satoshi Nakamoto has disappeared from the planet.
According to The New York Times, a little more than half of all Bitcoins are already out in the world, but because the system will release Bitcoins at a progressively slower rate – the system is designed to make the algorithms increasingly difficult to solve — the work of mining could take more than 100 years. A recent Times article reported: “The work the computers do is akin to guessing at a lottery number. The faster the computers run, the better chance of guessing that right number and winning valuable coins.”
Currently computers mine about 3,600 Bitcoins a day, taxing computing capacity in the process.
“Bitcoin is pushing the limits of semi-conductor processing,” said Hans Olsen, one of the event panelists, a veteran semi-conducting executive and former chief executive officer of Alydian.
Today, all of the machines dedicated to mining Bitcoin have a computing power about 4,500 times the capacity of the United States government’s mightiest supercomputer, the IBM Sequoia, according to calculations done by Michael B. Taylor, a professor at the University of California, San Diego. The computing capacity of the Bitcoin network has grown by around 30,000 percent since the beginning of the year.
John Ford, Vice President of Sabey Data Centers, said, “It is no coincidence that Washington State is a hub in Bitcoin’s explosive growth, thanks to our computer-friendly inexpensive hydroelectric power and cool climate. Sabey Data Centers currently supports the Bitcoin industry in several of our data centers.”
At the Tech in Focus event, Mr. Englund of the Bitcoin Foundation stated that there are plenty of opportunities for entrepreneurs to invest in Bitcoin’s infrastructure, everything from ATMs to exchanges.
About Sabey Data Centers
With a portfolio of more than three million square feet of mission critical space, Sabey Data Centers is one of the oldest and largest privately owned multi-tenant data center owner/developer/operators in the United States. Sabey specializes in scalable, custom-built solutions including data center ready shell space and fully turnkey data centers managed by Sabey’s award-winning critical environment staff. Consistently recognized for its reputation for operational excellence through its world-class data centers and sustained uptime, Sabey is proud to provide data center services to many of the world’s top financial, technology and healthcare companies. www.sabey.com
About WTIA
WTIA creates meaningful connections between technology professionals and organizations that expand opportunities, increase collaboration, and drive business success. As the independent voice of technology in Washington, WTIA provides tangible benefits through effective advocacy, access to resources, and high-impact professional networking. WTIA supports workforce development and helps promote and sustain a vibrant climate for technology industry growth. www.washingtontechnology.org.
About Wowrack
Wow Technologies, Inc. (dba Wowrack and Coloinseattle) is a cloud service provider; offering various Hosting services including Managed Hosting Solutions, Dedicated Server Solutions, Colocation, Virtualization, Bandwidth Delivery and Managed Services. Our competency includes being able to design, provision, implement, manage and monitor high traffic websites that require high availability and redundant infrastructure. For more information please visit: www.wowrack.com www.coloinseattle.com
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