Min­ing for Bit­coin: A look in­side Hut 8 fa­cil­ity

The Drumheller Mail - - SPORTS - Kyle Smylie

Just north of Drumheller, con­nected to the ATCO Elec­tric sub­sta­tion, are hun­dreds of thou­sands of servers work­ing 24/7 to mine bit­coins, the cryp­tocur­rency which made in­vestors mil­lions al­most overnight and has promised to be the fu­ture global cur­rency for the world.

Hut 8 Min­ing, which has sim­i­lar fa­cil­i­ties in Medicine Hat and Three Hills, has in­vited me in­side their fa­cil­ity to see just what bit­coin min­ing looks like. In­side what are es­sen­tially mod­i­fied sea cans -- there’s 48 of them here -- thou­sands of com­puter servers work to earn bit­coins by solv­ing com­pli­cated math­e­mat­i­cal prob­lems. Ev­ery sec­ond, over 150 quadrillion (yes, quadrillion with 15 ze­ros) at­tempts are made to solve the prob­lems.

“There’s an al­go­rithm that’s re­leased,” says data cen­tre man­ager Dez Horwood. “Ba­si­cally, we solve the al­go­rithm as quickly as pos­si­ble. By solv­ing it we get a paid per­cent­age of a bit­coin.”

Once solved, the so­lu­tion is cross-checked by ev­ery other server in the bit­coin net­work to en­sure the so­lu­tion is cor­rect. The so­lu­tion changes ev­ery 10 sec­onds so es­sen­tial the bit­coins are im­pos­si­ble to coun­ter­feit or hack, which gives bit­coin the se­cu­rity which is the se­cret to its suc­cess. This net­work is dif­fer­ent than phys­i­cal cur­rency as we know it, which is ‘cen­tral­ized’ as gov­ern­ments have con­trol of how much of their na­tional cur­rency is in cir­cu­la­tion. Cryp­tocur­ren­cies are in the­ory in­de­pen­dent of gov- ern­ment, which strength­ens its se­cu­rity. Head of power Eti­enne Sny­man says the beauty about bit­coin is that it’s ‘de­cen­tral­ized.’

“There’s no sin­gle data cen­tre that has all the in­for­ma­tion. There’s thou­sands of fa­cil­i­ties around the world that have what we call the ledger. It is a record of all prior trans­ac­tions and that is stored all over the world. When the al­go­rithm is solved, that block which is full of in­for­ma­tion gets added to.”

The whole process takes a con­sid­er­able amount of power. The fa­cil­ity uses up to 42 megawatts of power, which is well over twice the elec­tric­ity needed to power a town the size of Drumheller, Sny­man says. You can feel a con­tin­ual blast of heat com­ing off the ex­haust side of the server blocks, as the pro­ces­sors work they pro­duce a con­sid­er­able amount of heat and staff need to make sure the blocks don’t over­heat. Sny­man says that’s part of the rea­son why Hut 8 chose to op­er­ate three fa­cil­i­ties in Al­berta. The frigid win­ter months pro­vide free air con­di­tion­ing, the power here is rel­a­tively cheap with the prov­ince’s abun­dant wind and nat­u­ral gas re­sources, and Canada has a sta­ble gov­ern­ment com­pared to other na­tions around the world. The fa­cil­i­ties can work be­tween -40 and +40 de­grees, but ideally the tem­per­a­ture in­side the servers is around 0. They are lo­cated in the lot ad­ja­cent to the elec­tric sub­sta­tion, re­duc­ing in­fras­truc­ture costs and the land that needed to be dis­turbed to in­stall the ro­bust elec­tric lines re­quired to trans­fer that amount of power.

In­side the main of­fice are dozens of screens set up to mon­i­tor the ma­chines, their tem­per­a­ture, how many pro­cesses are be­ing made by the servers, and video surveil­lance of in­side the server boxes and the sur­round­ing premises. About two dozen em­ploy­ees work around the clock in twelve-hour shifts to make sure ev­ery­thing is run­ning smoothly, re­pair­ing elec­tron­ics like the pro­ces­sor boards, CPUs, and moth­er­boards. While pho­to­graphs of in­side the servers were not al­lowed due to the pro­pri­etary tech­nol­ogy used, they es­sen­tially look like the moth­er­boards you’d find in a typ­i­cal desk­top com­puter at­tached to fans and a power sup­ply unit.

The bit­coin boom hit its peak in De­cem­ber 2017, with prices surg­ing above $24,000 CDN for a sin­gle bit­coin. But that bub­ble soon burst, and the price of the cryp­tocur­rency has con­tin­u­ally dropped since then. In a two week span in early No­vem­ber, bit­coin lost about 40 per cent of its value, and is now traded at around $5,500 per coin, lead­ing fi­nan­cial ex­perts and in­vestors won­der­ing about the fu­ture of the cryp­tocur­rency which was promised to change how the world does busi­ness. While in­vestors are won­der­ing if they will ever see a re­turn on their in­vest­ment like they did in late 2017, ex­perts are say­ing that bit­coin, or other cryp­tocur- ren­cies like it, are here to stay.

“I can’t imag­ine the world will have 180 dif­fer­ent cur­ren­cies in 100 years,” says Sny­man. “So if it’s not bit­coin it’ll have to be some form of global cur­rency at some point. There’s a lot of fric­tion in mov­ing money around the world in terms of chang­ing cur­ren­cies and jump­ing from dif­fer­ent banks,” he says, point­ing to the col­lapse of the Greek and Ital­ian economies after strug­gling with the switch to the Euro. “Gold kind of serves that pur­pose now.”

The com­par­i­son of cryp­tocur­ren­cies with gold makes sense. The gold rush and the cryp­to­min­ing boom both had prospec­tors rac­ing to get rich quick and take ad­van­tage of new-found re­sources, with many call­ing bit- coin ‘dig­i­tal gold.’

“I can kind of see that be­cause if you look at gold, it is a metal that is used in elec­tron­ics but its value is al­most neg­li­gi­ble. Peo­ple at­tach a value to gold be­cause it has cer­tain at­tributes that they don’t re­ally use. And of­ten times gold ex­changed isn’t phys­i­cally chang­ing hands. Bit­coin has some of the same at­tributes but it is more ver­i­fi­able, it’s more trans­par­ent. You don’t need an army to trans­fer it safely from one side of the world to the other,” Sny­man says.

For now, the fa­cil­ity in Drumheller isn’t go­ing any­where, and nei­ther is bit­coin. Hut 8 con­tin­ues to mine about 20 coins a day at their fa­cil­i­ties. Due to the na­ture of the bit­coin sys­tem, there is a max­i­mum of 21 mil­lion coins avail­able to be mined, and as of now, about 17 mil­lion have been earned. That means the race is on for the re­main­ing coins, as com­pa­nies around the world con­tinue to step up their arse­nal of code-crack­ing com­puter sys­tems. Hut 8 re­cently ac­quired 12 new block­boxes for the Drumheller fa­cil­ity, up­grad­ing their op­er­at­ing ca­pac­ity by 20 per cent with more pow­er­ful ma­chines. Even though bit­coin might be down, Sny­man says the bit­coin busi­ness “has changed, but it’s down less than my Gen­eral Elec­tric stocks.”

Thou­sands of com­puter servers work to earn bit­coins by solv­ing com­pli­cated math­e­mat­i­cal prob­lems. Ev­ery sec­ond, over 150 quadrillion (yes, quadrillion with 15 ze­ros) at­tempts are made to solve the prob­lems.”

mailphoto by Kyle Smylie

Head of power Eti­enne Sny­man and data cen­tre man­ager Dez Horwood out­side of a server block.

In­side the mon­i­tor­ing cen­tre.

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