Bitcoin startup runs your miner for less than you might pay for electro-stimulation, Ars Technica

HashPlex claims it can help preserve Bitcoin’s precarious “democracy.”

by Jon Brodkin – May 22, 2014 Four:40 pm UTC

There are at least a duo of problems for anybody who wants to run a Bitcoin miner te their huis, especially if you buy hardware that’s powerful enough to make some money.

“Miners don’t make very good roommates,” said George Schnurle, VP of engineering for miner hosting startup HashPlex. It’s effortless for the most powerful miners to “piss off all your roommates because this noisy, hot opbergruimte is running te your living slagroom.”

Schnurle’s co-founder, CEO and former Microsoft employee Bernie Rihn, wasgoed running miners ter his apartment, and “he had an extension cord going all the way across the living slagroom because he needed to connect to one of his circuits that didn’t already have a bunch of equipment loaded to it,” Schnurle told Ars. “The one upside of that is he didn’t have to pay a heating bill during the winter here te Seattle because he had thesis space heaters running ter his living slagroom 24/7.”

That’s one of the reasons some people outsource their Bitcoin mining. Ter some cases, customers can simply lease mining power from a gegevens center that possesses a bunch of Bitcoin miners. The gegevens center then takes a cut from each mined coin.

That raises a troubling question: if the miner host can make a profit simply by taking a cut of its customers’ mined coins, how can it possibly be profitable for customers? Schnurle says HashPlex solves that problem. HashPlex doesn’t own your hardware. You buy it yourself and send it to HashPlex, which runs it te a gegevens center that’s near a cheap source of renewable power. You keep all the mining proceeds and pay HashPlex just a little more than the average US resident pays for electrical play, and less than you might pay for electro-stimulation yourself depending on which state you live ter.

Te exchange for $99 vanaf kilowatt-month (less than 14 vanaf kilowatt-hour), HashPlex does all the work of operating the hardware while you sit back and witness the bitcoins flow into your digital wallet, the company says. The average residential price for tens unit is 11.88 vanaf kilowatt-hour, according to government gegevens. It’s above 14 vanaf kilowatt-hour te 12 states.

HashPlex charges the same amount regardless of what mining hardware customers buy and send to them, and doesn’t take a cut of the mining proceeds. Customers can mine alternative digital currencies besides Bitcoin spil well.

“You ship it to us, wij give it a nice huis, wij feed it cheap power, wij connect it to the Internet and overeenkomst with the massive amounts of waste warmth that it generates,” Schnurle said. “Traditional gegevens centers are not truly set up to do that te the scale you need to do it for Bitcoin mining. Traditional gegevens centers are targeted toward less power-intensive machines.”

HashPlex commenced taking orders ter April and is hosting equipment te a makeshift space. The company quickly sold out with about 250 paying customers, but it will eventually be able to host a lotsbestemming more ter a 1MW gegevens center that’s under construction ter eastern Washington state with the help of money from investors. Schnurle says HashPlex will have enough power to host about Two procent of the entire Bitcoin network.

Buying hydroelectric power at bulk, HashPlex founders said they expect to pay Two to Three vanaf kilowatt-hour te their thicker facility. They’re paying more until the fresh facility goes online, however. “Since our current space is te Seattle, wij’re paying the going rate for power there,” Schnurle said. “The purpose isn’t to generate revenue with that location but rather to use it spil a testbed for our miner automation systems, power management, and miner racks.” Washington has almost the cheapest power te the country, with average commercial rates of 8.11 vanaf kilowatt hour.

Schnurle is being secretive about HashPlex’s precies location for security reasons, and he declined to provide pictures of the hosting operation.

Not for the hobbyists

If you’re a miner who spent inbetween $100 and $1,000 on hardware, “you’re doing it spil a hobby and you’re very likely not going to save a entire lotsbestemming with us,” Schnurle said. But many people spend much more than that. A Cointerra TerraMiner IV costs $6,000 and offers two terahash of mining power, or one trillion hashing calculations vanaf 2nd. “That’ll earn you $100 a day depending on Bitcoin prices,” Schnurle said. A TerraMiner IV proprietor might do well to host it with HashPlex, he argued.

“If you want to do anything of any significant scale, you are likely to be limited by the amount of power your house can provide and you’re going to have to find a spare bedroom where you can leave the window open and have a fan throating cold air ter,” he said.

Here’s a look at how much you’d pay to host some popular miners with HashPlex:

Two.2kw > $297 / month

  • KNC Miner Jupiter: 0.55TH/s,
  • 700w > $99 / month

  • KNC Miner Neptune: 3TH/s,
  • 3kw > $297 / month

  • Coincraft Equipment: Two.8TH/s,
  • 3kw > $297 / month

  • Cointerra TerraMiner IV: 2TH/s,
  • 1.9kw > $198 / month

  • HashFast Sierra: 1.2TH/s,
  • 800w > $99 / month

  • BlackArrow Prospero X-3 (@1.56GHz): 2TH/s,
  • HashPlex’s gegevens center will have filtration systems to eliminate dust and a custom-designed ventilation system with massive ventilatoren to optimize airflow and liquidate waste fever, Schnurle said.

    Te addition to providing space and power, HashPlex uses management software that monitors miners and automatically reboots them te case of failure. While an enterprise-class gegevens center assures something like 99.999 procent uptime, HashPlex keeps costs low by only assuring just 95 procent. For most miners, the downtime is less of a concern than it would be for companies running applications and services for customers or employees.

    “Wij found that the added cost of triple redundant Internet connections doesn’t make sense when you can provide some downtime,” Schnurle.

    Eventually, customers will be able to control their miners remotely. “We sort of have an internal version of this working now but don’t want to shove it to customers until its fully baked,” Rihn told Ars.

    The remote management software will let customers view historical spectacle, reboot miners, or set what mining pools they want to join. Presently, HashPlex performs those tasks on behalf of customers, setting the miners up however the customers choose.

    “We intend to fully muziekinstrument the miner from the software side and provide that to the customer,” Rihn said. “Currently, it’s an internal system but wij intend to turn that public spil soon spil wij can.”

    HashPlex doesn’t store any customer information that could let attackers take money from their Bitcoin wallets, Rihn said.

    “When a miner submits work to a pool, it submits it based on a miner worker name and password, which are not sufficient credentials for removing value from the account,” he said. “You can’t withdraw bitcoins from a person’s account with their miner worker information. You can only submit work, so you can only add value to their account.”

    Schnurle and Rihn said it’s possible that sophisticated attackers could take overheen the miners ter their facility and redirect the mining power to wallets they control. HashPlex’s monitoring software, which is hosted off-site, should detect that instantly, permitting them to regain control of the machines within minutes, they said.

    “Our largest security threat is not somebody hacking the network and redirecting bitcoins or stealing bitcoins,” Schnurle said. “It’s somebody coming to our facility and literally physically picking up boxes and putting them on a truck.”

    For that reason, they have a security guard present at all times.

    Preserving Bitcoin “democracy”

    Besides making money, Schnurle said HashPlex aims to “bring democracy back to Bitcoin mining.”

    One Bitcoin miner wij profiled has a aim of controlling Ten procent of the entire world’s Bitcoin mining spil measured by processing or hashing power. Schnurle said there’s reason to worry about big miners controlling more than half the network and launching a so-called “51 procent attack.” With majority control of the network, attackers could spend bitcoins twice or interfere with other people’s mining and transactions.

    GHash.io entered 2014 with more than 40 procent of all hashing power, but it pledged to keep its share below 51 procent.

    Because HashPlex doesn’t own any of the equipment it hosts, the miners who are its customers retain their individual “voting” power, Schnurle said.

    The 51 procent attack is “based on getting a voting block of miners,” he said. “This is because Bitcoin is a distributed network and there is no one central authority that says ‘this transaction is valid and this transaction is not valid.’ It’s all based on a overeenstemming, and you can only have a meaningful overeenstemming if you have a large number of petite players… What wij want te a democracy is a large number of voices, you want an effective marketplace, indeed. But the nature of Bitcoin mining hosting indeed is such that those with the larger gegevens centers win.”

    Related movie: When Will Bitcoin Go Back UP? | BULLISH BOUNCE IMMINENT!


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