What is a Bitcoin Farm?

Bitcoin mining farms and all kinds of cryptos consist of concentrating a large amount of mining hardware in the same place and keeping it operational.

Below we expand the information related to bitcoin mining farms and review what they are, what they are for, which are the areas with the most popular mining farms in the world, the main controversies surrounding them and everything you need to know if you want to stay up to date on the bitcoin mining process and its main novelties.

What is a bitcoin mining farm

A bitcoin mining farm is thus basically a space where bitcoins are generated. cryptocurrencies, on a large scale, using specialized equipment such as Bitcoin mining ASICs, which perform many computational calculations of data at the computer level. It is important to keep in mind that there is no concrete concept to define from how many mining equipments a project becomes a mining farm, but as a general rule we talk about projects of a medium size.

Cryptocurrency mining (in this case bitcoin) is the process by which miners use hash or computing power to process transactions and earn rewards, in this case in the form of bitcoin. In other words, it is the process by which new transaction records are added as blocks to the blockchain.

Bitcoin needs a consensus mechanism to ensure that stakeholders agree on transactions that are legitimate in order to prevent people from spending the same money twice. In this way, to achieve this, bitcoin uses proof of work. Thus, when a block of transactions is completed, miners must compete to be the first to solve complex mathematical problems or equations. Upon achieving this, they generate a 64-character hash that validates the transaction, allowing miners to generate bitcoin as a reward.

While in traditional farms plants are grown and animals are raised to generate products for human consumption, in bitcoin mining farms they work generating these cryptos, although in a different way.

We must bear in mind that there are mining farms for many different cryptocurrencies. Likewise, One of the important points when maintaining a cryptocurrency farm is to appreciate that having good air conditioning for the equipment is key. It is also important to take care of the mining power offered. In addition, we must appreciate that there are some programs designed to facilitate remote and simultaneous monitoring of mining hardware.

On the other hand, fluctuations in the market They also influence the profitability of mining, as well as the electrical cost and the difficulty of mining the network in which it is operating.

How Does a Bitcoin Farm 2ork?

We continue to review the operation of a bitcoin mining farm. Getting a bitcoin mining farm up and running is a complex procedure that goes far beyond connecting a few computers and running a mining program. Bitcoin mining requires conditioned facilities, of specialized software to monitor the different equipment and even of a number of people who are in charge of monitoring the hardware and performing maintenance on the equipment whenever it is necessary to do so.

Of course, mining teams never rest. Once plugged in they should not be switched off and if they are switched off it should only be for maintenance. In order to get the most out of mining equipment, it is essential that they are active all the time. In addition, it is key to continuously monitor the operation of the mining farm: from the hardware used to heat dissipation and electrical connections.

Maintaining a Cryptocurrency Mining Farm

In this way, when we talk about a bitcoin farm we are referring to dozens or hundreds of mining devices that work at the same time. In mining farms, special software is also used to monitor the performance of each of the miners, which allows operators to detect and correct faults remotely.

Likewise, when it comes to maintaining the hardware of mining farms, it is key to do it in parts. This means that it is interesting to carry out the maintenance of a specific part of the equipment while the rest of them continue to be active. In this way, after the reinstallation of the equipment that has already been checked, it will be possible to disconnect and work with those that have not yet been checked. This is key because it allows you to keep the bitcoin farm operational.

What types of mining farms exist?

Likewise, next, we will also assess the different types of mining farms that exist. It is possible to classify them into different types depending on the hardware used for mining. We find the mining farms that work with ASIC hardware with application-specific integrated circuits, with GPU or graphics processing units and with CPU or central processing units.

First of all, ASICs are equipment designed to mine specific algorithms. In this way, they are undoubtedly more efficient and powerful mining farms compared to other types of mining hardware. ASICs are the most used equipment in bitcoin farms, although they are also widely used in mining other cryptos such as bitcoin cash, litecoin, decred or dash.

Likewise, GPUs are designed to process graphics, but since they are powerful and versatile, they are equipment that is also used to mine cryptocurrencies in some cases. Finally, CPUs are less used today to create mining farms, although it is possible to monetize these tools in this part of the industry.

Cryptocurrency farms can mine more than one crypto, but this always depends on the hardware being used. The farms that use CPU or GPU equipment allow to work with different types of cryptocurrencies while the farms that work with ASIC equipment are designed to work with more specific algorithms.

Thus, bitcoin mining farms usually work with ASICs. ASIC miners are subject to a mining algorithm and not to a specific cryptocurrency. In this way, the ASICs work with this kind of “language” and can communicate with all the cryptos that “speak” it. Thus, a farm that is dedicated to bitcoin mining will also be able to mine peercoin and bitcoin cash, because all these cryptos work with the SHA-256 mining algorithm.

Is there money to be made from a mining farm?

We continue with one of the most interesting points for everyone who is considering entering the universe of cryptocurrency mining: if cryptocurrency mining is profitable.

In this way, as it happens with everything that has to do with making profits in the crypto sector, the answer is that this is quite relative. Whether or not to generate income from mining depends on many different aspects. The first of them is to keep in mind that it is a volatile market and therefore it is important to know it well and choose a good time to be able to generate money with a mining farm.

Likewise, the number of miners present in the network must also be taken into account. This is important in relation to the consensus mechanism. Almost all cryptos work on a PoW or Proof of Work basis. This test includes an automatic difficulty adjustment that changes based on the global network hashrate to balance block production.

On the other hand, the price of other services such as internet and electricity will also affect the income of mining farms. Electricity is the most important point to consider because the equipment used to mine cryptos consumes a lot of energy to process data quickly. In this way, the most interesting places to mine bitcoin are the areas of the world with stable and cheap electrical energy. For example, there are some places in the world with very cheap energy or electricity, but instead they have poor services and therefore are not a good place for bitcoin mining.

Finally, the return on investment that must be made in principle to be able to set up a bitcoin mining farm must also be taken into account: from acquiring the hardware for mining to internal and external facilities. In addition, we must also assess the cost of maintaining the equipment and the place, the cooling systems and the costs of the operating systems used, including those that usually work with monthly or annual subscriptions such as monitoring.

Economic and energy efficiency

Similarly, there is a general idea that Bitcoin mining farms heavily pollute communities and contribute to greenhouse gases, but many experts agree that data processing centers and power plants are really being confused. Of electricity.

Bitcoin mining data centers are not that different from those occupied by other large companies such as Google, Apple or Amazon. Mining farms work by buying energy from a generating plant like other companies. In addition, the mining farms do not emit carbon dioxide or other types of pollutants: only the heat generated by the machines, which can be controlled with ventilation systems.

It is also essential to take into account that more and more mining farms run on renewable energy when carrying out all their operations. In fact, according to various studies, this industry uses approximately 58,4% of sustainable energy, making it a very sustainable industry and far from sources of electricity generated created with fossil fuels.

In order to save, in addition to choosing the best possible hardware, companies in the sector decide to locate their mining farms in the areas with the most economical and efficient energy on the planet. Many companies in the sector are locating their plants in places with the cheapest electricity, as we presented above, but others are deciding to bet on places where cooling is completely natural, such as the Arctic Circle in northern Sweden.

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