CoinTerra – the firm that provides the hardware and software that power the bitcoin blockchain ecosystem – has signed a multi-megawatt datacentre deal with colocation and managed service provider CenturyLink. The datacentre provider will host CoinTerra’s rapidly growing bitcoin-mining operations.
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The deal comes at a time when it is estimated that at least $600m will be spent on infrastructure for bitcoin mining in the second half of 2014, representing a huge opportunity for datacentre providers.
Bitcoin is a digital currency that operates on a user-powered, peer-to-peer payment network. It is not backed by any country's central bank or government and transactions are made when users digitally exchange anonymous, heavily encrypted hash codes across a peer-to-peer (P2P) network.
The network monitors and verifies the transfer of bitcoins between users. Each user's bitcoins are stored in a program called a digital wallet, which also holds each address the user sends and receives bitcoins from, as well as a private key known only to the user.
Processing bitcoin transactions
Bitcoin mining is the processing of bitcoin transactions, in which the records of current bitcoin transactions, known as a blocks, are added to the record of past transactions, known as the block chain.
Originally, bitcoin mining was conducted on the CPUs of individual computers, with more cores and greater speed resulting in more profitability. After that, the system became dominated by multi-graphics card systems, then field-programmable gate arrays (FPGAs) and finally application-specific integrated circuits (Asics), in the attempt to find more hashes with less electrical power usage.
It is estimated that more than 15% of the total bitcoin network runs using CoinTerra hardware, making the one-year-old company the market leader in providing bitcoin mining systems.
“As the bitcoin ecosystem continues to flourish, CoinTerra’s continuously expanding mining operations require reliable power and extremely high levels of availability to ensure peak performance,” said company chief executive, Ravi Iyengar. “CenturyLink’s expertise, operational efficiency and immense datacentre presence provide us with the ability to safely and securely operate truly powerful and reliable bitcoin mining on an enterprise scale.”
In Europe, the colocation and managed cloud provider has datacentres in the UK and in Germany. Its UK datacentre portfolio includes facilities in London Docklands, Slough and Reading, interconnected by direct low-latency fibre routes. While the London datacentres cater to the financial services sector, the Slough and Reading facilities are aimed at hi-tech players.
With CenturyLink, CoinTerra’s growing bitcoin mining operations are housed across multiple datacentres. Under the new multi-megawatt deal, additional locations will be brought online in the coming months.
“CoinTerra started its search for a colocation provider by looking for commodity power,” said David Meredith, senior vice-president and general manager at CenturyLink Technology Solutions.
But the bitcoin player selected CenturyLink for its datacentre capabilities and efficient cooling systems, he said.
“We make life easier for CoinTerra, allowing them to focus on what they do best – developing and operating bitcoin-mining processors and systems – while we ensure the security and reliability of their expanding infrastructure.”