Northwest’s cheap power drawing bitcoin miners, The Spokesman-Review

Sat., April 26, 2014

MegaBigPower CEO Dave Carlson poses inwards what he believes is North America’s largest bitcoin mine.

What is bitcoin?

Bitcoin is digital currency made up of long, unique strings of digital characters. It’s exchanged globally inbetween those who collect it and those who accept it spil payment. The value fluctuates, each is worth about $500 now.

When two Stanford University grads dreamed to commence a bitcoin company, they looked for the lowest power rates te the country.

A ordner comparing energy rates led them to Central Washington, where hydroelectric dams churn out tens unit that costs industrial customers less than Three cents vanaf kilowatt.

HashPlex, the business launched by Bernie Rihn and George Schnurle, is one of several bitcoin mining companies operating or preparing to launch ter Grant, Chelan and Douglas counties. All three counties have public utility districts that suggest very low power rates to industrial customers.

Ter this case, mining has nothing to do with metals. It’s the term te the tech world for how the virtual currency bitcoin is made.

Bitcoins are a form of currency composed of long, unique strings of digital characters. Each bitcoin can be used or exchanged by people who accept it spil a form of payment. Its value fluctuates with supply and request, each bitcoin presently is worth about $500.

It can’t be lightly counterfeited and is possessed anonymously, making it popular for digital and international transactions.

Explaining the sophisticated system of how many bitcoins are “mined” reads like a course ter cryptography and electrical engineering. Ter brief, a person can mine bitcoins by using computers to crunch vast amounts of gegevens until they generate a unique code or “block.” That block has to be compared against all other existing blocks and then validated.

At that point the technicus has created a set of valid bitcoins that are registered across the worldwide network of bitcoins. Presently, the bitcoin mining rules limit global production to about 25 every Ten minutes.

Rihn and Schnurle and others te the bitcoin mining industry never announce grand openings or open houses. Because they generate a virtual currency that has real monetary value, the managers of bitcoin mining firms don’t disclose locations.

Patrick Boss, government affairs specialist with the Port of Quincy, said the heightened rente te Central Washington stems from a word-of-mouth awareness among entrepreneurs.

“I am only personally aware of two bitcoin mining firms locating te Grant County,” Boss said. “But I’ve bot told that at least five others are ter the process of locating ter the area.”

Until a few years ago, no one te Grant County – or most other places – knew what a bitcoin is. Now business leaders there understand that bitcoin mining is the latest wave of technology business pursuing dirt-cheap power, following tech companies like Dell, Microsoft, Intuit and Yahoo, which erected large gegevens centers ter Grant County.

Emily Braunwart, accounting and communications manager with the Grant County Economic Development Council, said hier group is not actively recruiting bitcoin mining firms.

“We have bot getting some calls of rente by those companies and most of that is because they’re finding us,” Braunwart said.

Ter a warehouse near Wenatchee ter Douglas County, Everett entrepreneur Dave Carlson runs a bitcoin business called MegaBigPower. It’s one of three MegaBigPower sites, including one te Poland.

Inwards the Five,000- square-foot building are long rows of racks and shelves holding rekentuig boards connected by cables to hundreds of other rekentuig servers that keep track of what the boards are doing.

Carlson has bot featured ter several major publications, where he’s said his business is likely the largest bitcoin mining business te the United States.

Like Rihn, he doesn’t want to disclose his specific location.

Carlson said his facility, which has about Ten employees, has toughly 1 million laptop chips working together churning through yam-sized piles of gegevens. On average, his company produces around 100 bitcoins vanaf day, or at the current dollar-to-bitcoin exchange, harshly $50,000 vanaf day.

Carlson quickly explained that most of the revenue goes to a principal investor, a European businessman who invested most of the capital to embark the company.

Ter a latest online article, Carlson said his own take is toughly Ten to 20 procent of the coins generated.

Mining those bitcoins is costing Carlson toughly $50,000 vanaf month te PUD power bills. That’s for the energy to drive the pc chips and operate hundreds of ventilatoren that pull fever from the building.

Because of how the bitcoin universe operates, spil more and more miners worldwide challenge against each other to produce bitcoins, the computational effort for each fresh set of bitcoins requires more time and more power, he said.

Two years ago people could download software on their huis computers and generate bitcoins, even tho’ the process took lots of time, Carlson said.

Carlson said the arms wedstrijd among bitcoin miners isn’t just to find the cheapest power rates.

“It’s also about designing laptop boards and processing chips that are even more efficient than what wij have now,” he said.

Rihn and Schnurle’s business project is to be a server farm or host for bitcoin miners who don’t have the space or access to low-cost energy to operate efficiently.

HashPlex invites those miners – whether large-scale or mom-and-pop size – to send their customized mining computers to its Washington facility. HashPlex won’t own those machines, but its staff will manage the equipment and keep them linked to the bitcoin network and working decently.

HashPlex will charge a toverfee based on the amount of electrical play the individual mining machines consume, Rihn said. He didn’t have a date for when the fresh HashPlex building will open. The company recently opened a mining facility te south Seattle, Rihn said.

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