Life after mining

Mining of Ethereum, a digital currency, may be coming to an end, according to Vitalik Buterin, a co-founder of Ethereum Foundation, who has repeatedly mentioned that possibility. Mining Solutions which manages a pool of miners and a data center in Novosibirsk, decided to prepare itself for mining’s death and to start leasing its computation capacities for resolving various other tasks such as artificial intelligence, gaming activities, etc. Stanislav Chulkov, Mining Solutions’ founder, voiced that at the Russian Blockchain Week conference. In fact, the idea of employing computation capacities for other needs apart from mining, has been thick in the air.

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How computation capacities may be used?

According to Jon Peddie Research, 20 million graphics cards (GPU) were manufactured in 2017, 5 million of those were purchased specifically for the mining purposes. That is, for at least 1,000 mining rigs of 1,000 or more GPUs each. Still, most graphics cards are intended for computer games, not for currencies mining. The largest data center (50,000 GPUs) is located in France, is mining Monero (number 10 on the cryptocurrencies capitalization list) and is worth EUR 20 mio. In Novosibirsk, Russia, there is Mining Solutions mining rig (1,000 GPUs) which leads a pool of miners with aggregate capacity, according to one of the project founders approached by Invest Foresight, reaching further 100,000 graphics cards. Experts doubt though that a large pool like that may actually exist since the graphics cards have not been supplied to Russia on such a scale.

When Mining Solutions built its new data center, mining costs went up by 30% due to the need to remove heat and install air conditioners. The company then came up with several programs, including those that reduce the operating temperature at NVidia GF 1060 graphics cards by 20%; a driver at AMD RX-470 chip which cuts energy consumption by the rig by 20% and elevates the computation speed by 5 Gh/s. It was announced the products will be available after the crowdsale by Mining Solutions is launched on November 27. The company intends to raise ETH 60,000 or approximately $18 mio.

Some of the experts questioned by Invest Foresight, are skeptical about the project.

Alexander Pakulayev, Infinite Energy mining center managing partner, noted, “If the solution for GPUs improvement is integrated and only requires a one mouseclick, it is fine then, but still, it is hardly worth $18 mio. Similar solutions may be found on Youtube. People like the idea of providing computation capacities for rendering, artificial intelligence, etc. The money may be raised for such purposes. Nowadays, an ICO may generate more money than Ethereum mining. No mining rig can generate $18 mio within a month, even if such a rig has several thousand GP’s”.

What about mining rigs?

“GPU mining profitability is decreasing. Last May or June, a mining rig could pay off in two or three months. Now the return on investment is some ten months, even though such a rate of return is not bad either”, Mining Solutions believes. “It should be taken into account though that due to Byzantium upgrade [Ethereum improvement protocols] productivity of a GPU rig for Ethereum mining went up by 30%”.

Mining in Ethereum blockchain could go on, but then emerged a threat of POW refusal [Proof-of-work, or transactions security proof by miners work]. So Mining Solutions plan to lease decentralized capacities to generate programs allowing to employ spare capacities for the operation of artificial intelligence, virtual reality, for the needs of gamers or governments, etc. Artem Gurevich, Get Crypto co-founder, said on the sidelines of Russian Blockchain Week, that mining of such currencies as Ethereum will be over in 1.5 to 2 years.

Alexander Pakulayev believes that “in case Ethereum rejects POW, the capacities mining this currency may switch to Bitcoin gold mining”.

Stanislav Chulkov told Invest Foreight that having accumulated capacities of various pools, he can offer the cheapest data center for Tesla.

“Renting our data center will be cheaper than from Amazon. We have got rid of the major costs of data centers such as air conditioning, construction, numerous personnel. We will have decentralized capacities. We do not represent ourselves only, but our entire community”.

Still, these are merely intentions, as Tesla has not contacted Mining Solutions with a request.

“We do not have enough time. For the last six months we have been working on improving graphics cards, accumulating the pool, now we design a mining equipment of our own which is capable of mining various currencies”, Chulkov says.

Mining Solutions is not the only company though who thinks about leasing out computation capacities. Playkey is going for an ICO to set a platform via which miners using GPUs may lease their capacities to gamers thus generating more stable and less risky revenues compared to digital currencies mining.

Bitmain to join artificial intelligence developers’ race

The most influential mining pools owner and ASIC chips manufacturer, China’s Bitmain, is behind the Bitcoin’s first hard fork and emergence of Bitcoin Cash. Bitmain Antpool and BTC.com mining pools make up 28.9% of the aggregate computation capacities in the global Bitcoint network. According to Jihan Wu, Bitmain co-founder, a mine in Ordos, China, generates about $250,000 daily.

Bitmain started its works in artificial intelligence some two years ago. Recently it presented Sophon platform, its first artificial intelligence product. New products are able to distinguish speech and images, improve technologies of autonomous vehicles, surveillance systems, robotics technologies, Internet of Things (IoT), etc. In other words, they can educate neural networks in huge data centers worldwide. Bitmain will build its own data processing centers containing thousands of deep learning programs, and will lease such computation capacities to its customers, similarly to its Bitcoin rigs. Bitmain’s possible customers include Baidu, Alibaba and Tencent.

By Natalia Kuznetsova

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