If you want to get a glimpse of how big Bitcoin mining has become, take a moment and watch this video, of a Bitcoin mine being upgraded to new hardware. Bitcoin mining is an extremely competitive field by design, and margins are razor thin: if your operating costs are higher than average, after a difficult reset, you’re losing money. As a result, costly hardware upgrades happen at a keeping-up-with-the-Jonses pace, obsoleting whole racks of hold hardware overnight. The video gives us a neat look into what that process looks like.
The mine in question belongs to CoinMiner LLC in Cleveland, a mining startup that began with $70,000 in seed funding in 2013. The hardware they’re upgrading to is the Bitmain Antminer S5, an 1157 gigahash per second ASIC miner that runs about $500 on Amazon. Based on the video, it looks like they have somewhere in the neighborhood of a hundred of them being set up, meaning that this upgrade cost about $50,000. But that’s life in the fast-paced world of Bitcoin mining.
They’ll probably need to do it all again in six months.