Think Inside the Box
The Anatomy of a Bitcoin Mining deployment at a wellsite.
This one’s a bit longer.
For all the focus we place on Bitcoin's market, being a miner really comes down to one thing: running the mine. That means our #1 priority is successful deployment of ASICS at the wellsite.
The overview of the setup is quite straightforward. This is a good thing since simplicity is best for uptime and uptime is the #1 profit metric miners have any real control over. Today, six figures will get you into the smalle(r) size deployments with decent efficiencies of scale.
Let's see what a deployment looks like at a gas well.
Produced gas is piped into a manifold, which is a series of valves connected together to direct flow. Then it goes into a natural gas powered generator. Most off-grid Bitcoin miners appear to be using reciprocating generators, which operate like an oversized Chevy engine, though some have begun using turbines. Turbines are less economically efficient at small scale (<1 MW) but more forgiving on gas quality and require less maintenance. Generators may be mounted on a trailer or skid and create the power required for the ASICs.
ASICs are typically housed in a container, though compressor houses and trailers have also been used. Proper airflow & power distribution are key design factors. Operators may build their own containment or outsource it to a third party depending on preference. All containers are effectively a box to shelter ASICs organized on racks with massive airflow keeping the container cool.
Beyond this, there are four primary systems to make a functioning container, whether it’s a WD-40 and duct tape model or a UL-rated import: power distribution, network connection, cooling, and security. Power distribution is tied to ASIC type and preventative maintenance style, with smart PDUs allowing for more remote maintenance than simple direct wiring. Network connections tie the ASICs to a cellular or satellite network and have varying amounts of redundancy as the operator feels the need to reduce risk of isolation downtime. Most container cooling is simple convection heat transfer, with massive, filtered air intakes on one side and circulation fans on the other. Liquid cooling is gaining traction, though there are environmental and regulatory risks still being explored as well as cost, design challenges.
A few optional pieces of equipment may show up on site depending on the unique characteristics of the well and mine design. In the event of low pressure, a gas booster or screw compressor may be set between the gas source and manifold. Transformers may be set in between the generator and container to align power needs or just clean up the natural inconsistencies in small-scale power generation. Primary disconnect panels may also appear between generators and containers for emergency shutdown purposes and to simplify exchanging generators for maintenance as quick-connect technology leads many vendors to change out generators rather than try to repair them onsite.
As with any new operational concept, mines are always developing. Heat trace wire for cold sites or tin roofs over hot sites may improve a mine’s consistency. Glycol units reduce the cost of engineered fluid for liquid cooling. New innovations are sure to spread as off-grid mining gains popularity and begins to standardize.
Backing out to a conceptual level, the entire wellsite design must be built to maximize uptime
Consistency of gas volume and pressure must align with a mechanically sound generator or fleet of generators. Power output needs to be clean and within narrow tolerance to keep the ASICs running at peak performance, but there must be enough of a safety factor on generator output to not create significant downtime from maintenance. Network structure needs to include not only redundancy, but ties to active monitoring systems for air flow, temperature, and power input from the generator. Regular preventative maintenance inside the container should ideally line up with generator maintenance to prevent power drops or surges during oil changes from leading to significant mine downtime.
As the wisest operations engineers have found over the last hundred years: focus on the things you can change that make a large impact in your success. By properly designing an off-grid mine, you can maximize uptime, allowing you to survive in the crazy volatile world of cryptocurrency.
-Kyle Drew (Operations)
Institutions are buying
Blackrock discloses 6 million+ shares of Marathon Digital Holdings.
Blockware Intelligence describes deep institutional accumulation this summer.
Longform research you should check out —
MIT Research: Bribing Miners to Regulate Bitcoin (2016)
“Work is Timeless, Stake is not” - Proof of Stake longtail attacks (2016)