Inside the walls of a professional Bitcoin mining facility in Iceland

By on December 23, 2013, 4:00 PM
bitcoin, virtual currency, iceland, bitcoin mining, cryptocurrency, cloud hashing

Bitcoin mining was once feasible at home using GPU power but that’s no longer true. As the price of the virtual currency skyrocketed over the course of 2013, entrepreneurs like 31-year-old Emmanuel Abiodun began investing serious money in Bitcoin-specific mining hardware that effectively put GPU mining out to pasture.

While most serious Bitcoin miners elect to keep their setups private, Abiodun recently opened the doors to his massive mining facility in Iceland to journalist Nathaniel Popper. Behind the fortified gate and multiple security checkpoints lie more than 100 mining computers, each locked away inside a metal cabinet cooled by vents on the floor.

The machines, which require a massive amount of energy and produce excessive amounts of heat, are cooled primarily by the crisp Arctic air that is pumped in from outside. Abiodun, who runs a mining rental service known as Cloud Hashing, chose Iceland for the installation due to the cheap hydroelectric and geothermal energy sources.

The machines mine away on the Bitcoin network 24/7. At the end of each day, the mining haul is divided up and sent to the company’s customers. For example, the operation mined 225 Bitcoins one day last week which were valued around $160,000. The company said they keep about 20 percent of the capacity for their own use and rent out the remaining space.

Since October, the hardware has generated more than $4 million worth of Bitcoins based on current trading value. At that rate, Abiodun is set to make a hefty profit in no time flat should the crypto currency continue its meteoric rise.




User Comments: 11

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VitalyT VitalyT said:

Just how sick is all this...I'm ready to puke...

Some always gets rich on the back of every tulip mania, but most get burned, as always.

Guest said:

Just keep talking about it...

Just keep talking about it...

Just keep talking about it...

Just keep talking about it...

Just keep talking about it...

Just keep talking about it...

davislane1 davislane1 said:

Just how sick is all this...I'm ready to puke...

Some always gets rich on the back of every tulip mania, but most get burned, as always.

No opportunity in the world exists where everyone comes out a winner. Nothing wrong with someone enjoying success in an endeavor, however risky it might be. If someone couldn't afford to get burned exploring an opportunity, they shouldn't have explored it. What should make one queasy is that after centuries of documented asset bubbles, most people still can't spot them. The accumulation of wealth should not be sickening; ignorance of fundamental history should be.

As for Bitcoin's meteoric rise... Those types of gains are not sustainable in any asset class. If Bitcoin is to stick around for the long haul its crypto currency/fiat currency exchange value will have to stabilize.

wastedkill said:

If they did litecoin I could see this being a big hit but seeing as bitcoin will hit the max coins in 100days or so it seems like a massive waste of money... BTCGuild is the biggest earner they earn $250mill a year from the current hashrate of the pool and with those fees they earn roughly $50mill a year JUST from the fees alone.... $250mill earned a year with what only 3-7.5% going back to BTCGuilds owners is a massive amount...

Wish I made BTCGuild lol those are the real winners here not the miners.

1 person liked this | thelatestmodel thelatestmodel said:

I looked into this just now - it's apparently a terrible deal.

You can purchase "mining contracts" from the company, I.e. semi-renting their hardware to do your mining for you. The trouble is, with the difficulty of mining going up by approximately 50% each month, the contract you sign up for gets weaker and weaker as time goes by.

Therefore, as one reviewer pointed out, you can expect to earn 1.8 Bitcoins per year on their Gold plan, which costs $4000 per year. $4000 will currently buy you 6.15 Bitcoins. Not a good deal unless the price of Bitcoin continues to rise dramatically.

wastedkill said:

I looked into this just now - it's apparently a terrible deal.

You can purchase "mining contracts" from the company, I.e. semi-renting their hardware to do your mining for you. The trouble is, with the difficulty of mining going up by approximately 50% each month, the contract you sign up for gets weaker and weaker as time goes by.

Therefore, as one reviewer pointed out, you can expect to earn 1.8 Bitcoins per year on their Gold plan, which costs $4000 per year. $4000 will currently buy you 6.15 Bitcoins. Not a good deal unless the price of Bitcoin continues to rise dramatically.

Hence why it would be a better investment going into litecoin mining... I would think they would earn a lot of money from renting their hardware for mining and they keep the what 10%, you would easily earn your money back.

cliffordcooley cliffordcooley, TechSpot Paladin, said:

Not a good deal unless the price of Bitcoin continues to rise dramatically.
It is a good deal, a good deal for the host. They won't allow you to get rich on their dime, they will mislead you in thinking you will. And since the nature of Bitcoin value is not stable, good luck making a lawsuit against them. Especially when Bitcoin is not fully established as a legitimate currency or service.

Guest said:

What's the "real" value for the mining? by chances or exchange by something? still don't get it??:(

wastedkill said:

Is it just me or does this guy look like a hipster? Also to the guest the real value well its pretty much a ponzy scheme in a way as if people didnt dump money into it their wouldnt be money to get out of it.

Its mainly exchanging it buying low and selling high or even mining tons and hoping for a profit.

Guest said:

What he is doing with "renting" is actually money laundering..

leeblevy leeblevy said:

Great post ! please keep talking about it !...

Actually I also need some help !

I'm running an investigation for B-School project. It's about data center mining for Bitcoin. I've read a lot, many articles, I've been keeping up to date. The ONLY thing I've got left, is the appropiate size of a 5 megawatt (an aprox. estimation would work!) data center mining for bitcoin ... Is the only thing I cant answer because I dont have a Data Center near the place I live ... thank you very much !

#FreeCryptoWorld !

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