What’s The Difference Between A Mining Farm and a Data Farm?
By Mike Allen
Posted On May 29, 2018
For many, there are plenty of questions in regards to the differences between a mining farm and a data farm. Plenty of individuals think that mining farms are data farms in essence, or that they are two separate entities but aren’t sure how they co-exist with one another. To truly understand the differences between mining farms and data farms, you first have to understand what each one is and how they operate.
What Is A Mining Farm?
Originally, cryptocurrency was farmed through individual CPUs, and then gradually transitioned to GPUs. As with any other successful venture, eventually the idea is to scale what works and gradually phase out what doesn’t work. Small mining operations existed within small facilities or in individual household settings. When it was clear that there was a need to expand to increase revenues, mining farms were born.
Mining farms were created so that more GPUs could process more blockchain transactions at a time, which led to more revenues, and more profit over time. Mining farms are essentially a collection of hundreds, if not thousands of cryptocurrency mining machines operating within one facility.
The theory, is that by scaling the cryptocurrency mining operation, you can reduce power consumption costs, and labor. Some of the concerns associated with starting and running a mining operation is that there are two major concerns with each farm: 1.) technology costs, and 2.) technology maintenance.
Mining farms require a substantial amount of capital to purchase and develop mining machines to run multiple operations at once, and they also require maintenance to ensure that they are running smoothly – and replace burnt out parts when necessary.
Mining farms require expertise to maintain and provide upkeep for all of the mining equipment, which is where data farms come in. Mining farms and their efficiency are all based upon the expertise of those who maintain them, and if the staff isn’t knowledgeable about best practices, revenues and profits will ultimately suffer. Data farms help eliminate those risks substantially by turning over the important aspects to qualified professionals.
What Is A Data Farm?
Data farms or data centers as they are commonly called are a physical building that houses a collection of processors or server infrastructure in one central location. They are gigantic buildings that have consistent power with minimal outages, efficient cooling standards, and constant internet connectivity.
Plenty of companies create their own data farms so they can house their server infrastructure to ensure constant connectivity, and compute large amounts of data at one time with no issue.
A data farm is essential for large companies who need to gather information, process that information, and distribute the largest amount of solutions in an efficient manner. Data farms are essential for extracting raw data, decoding that raw data, and computing various outputs based on the inputs.
One unique thing about data farms is that they are incredibly efficient. Meaning that everyone who works in the data farm has to be focused on uptime for the equipment.
Data farms are managed and operated by information technology (IT) professionals who have expertise in maintaining technology and fixing problems quickly so that technology uptime remains reasonable. Large companies use data farms so that they can scale their business efficiently, while reducing risks associated with expensive technology, and efficient data computations.
How Do Mining Farms and Data Farms Differ?
There are several key differences between mining farms and data farms. First, is that mining farms are largely operated by the cryptocurrency mining operation itself. These facilities are owned, operated, and maintained by the company doing the cryptocurrency mining.
Due to the nature of the industry, the best way to increase revenues and profits as a cryptocurrency miner is to just buy a large facility and begin scaling the mining operation inside. The problem with this thinking, is that there isn’t much consideration into the power consumption, facility cleanliness, access to reliable power uptimes, and constant connectivity to the internet.
As mentioned above, one critical piece of a successful mining operation is upkeep of the mining equipment. If a cryptocurrency mining farm is located in a facility that routinely has dust issues, that dust will get inside the equipment and reduce the lifetime of the equipment. This means that there is a greater turnover of mining equipment, which ultimately hurts profit margins.
Another way in which mining farms and data farms differ is in how they deal with heat. Mining farms are built on packing as much cryptocurrency mining tools into a facility, without regard for efficiency standards like regulating heat. If mining equipment is frequently overheating, they will burnout quicker than the average lifetime of a product.
Data farms don’t have the same issues as mining farms due to the fact that they are used for different reasons. One critical aspect of data farms is that they are developed and constructed with one thing in mind – efficiency at all costs.
This means that data centers are built with the focus on providing as much up-time as possible, and getting as much out of the equipment as possible. Data farms are owned and operated by IT professionals whose sole purpose is to ensure that the equipment is kept in top condition for as long as possible.
The longer the piece of equipment is in tip-top shape, the more processing power and efficient the machines are. Data farms are built to ensure that they have efficient power consumption standards, are extremely clean, have the best power up-time, and are always connected to the internet. In addition, almost every single data farm has a substantial amount of backup generators – should anything go wrong.
Due to the fact that data farms are built with efficiency standards in mine, heating issues aren’t a concern. Data farms are well-cooled environments focused on making sure that the equipment doesn’t overheat, and that all computation or server equipment is constantly performing at its best at all times.
This means that data farms will have equipment that lasts longer over time, and requires less maintenance and upkeep – something mining farms constantly struggle with.
Why Are Data Centers Important For Cryptocurrency Mining Farms?
Data centers are increasingly becoming more important for cryptocurrency mining farms due to the fact that additional expertise is needed to run a successful mining operation. As mentioned previously, running your own mining farm can have its large set of complications and problems. Whether it is maintaining the equipment, maintaining the facility, or dealing with overhead costs like power and labor costs – it all adds up in the long run.
As cryptocurrency mining companies continually seek ways to raise revenues and increase profits, they are turning to large data center companies that are focused on doing what they do best – maintaining and scaling technologies for companies with minimal hassle.
It is much cheaper for mining operations to lease or enter into an agreement with a data center to manage all of the equipment, and lower expenses for their mining operation than to do it all themselves.
At the bare minimum, cryptocurrency mining operations can increase their revenues and decrease expenses simply by working with a data center that handles heat issues more efficiently than their own mining operation.
Due to the fact that mining machines typically only last a few months, a data center that manages the equipment from dedicated professionals can lengthen the amount of time that the equipment actually functions. For instance, if one graphics processor works full time on a cryptocurrency mining operation, it might last three months. But under the supervision and maintenance of a professional data center operation, it might double the lifetime of that GPU. This means that mining operations have to replace their equipment less often – saving them money for the bottom line.
What Does The Future Look Like?
Over time, data centers will become more important for mining operations that wish to scale and be successful. Data centers will remove some of the centralization that occurs from personal mining farms, which will create fewer issues over time. With fewer issues over time and less maintenance required from and reduced expenses for mining operations.
Data centers will become the go-to method as cryptocurrency mining operations only have to focus on a few things: 1.) the technology used in the data centers, and 2.) the contract to use the data center. All other things like labor costs, power consumption, and maintenance are all supervised by dedicated professionals and are covered by the data center themselves. Data centers will be the shining beacon of large scale cryptocurrency mining operations moving forward.
For many, there are plenty of questions in regards to the differences between a mining farm and a data farm. Plenty of individuals think that mining farms are data farms in essence, or that they are two separate entities but aren’t sure how they co-exist with one another.