Data Center Colocation for Cryptocurrency Mining

Disclaimer: We do not provide colocation services for cryptocurrency mining operations. Our main service to data centers and colocation centers for cryptocurrency mining is to provide backup generators for these facilities to ensure maximum uptime even in events like power outages. 

Cryptocurrency and the crypto mining trend have seen a rise, fall, and rise again since its inception. With currencies like Bitcoin, Ethereum, Bitcoin Lyte, and Ripple for example skyrocketing, plummeting, and leveling back out, there has been an increase in demand for crypto mining data centers within North America. While crypto mining originally started as a homegrown operation, it has been steadily evolving into larger operations and may scale up on par with data center levels.

As the cryptocurrency mining trend has become increasingly more mainstream, this trend has expanded into data centers via colocation opportunities. While this may be a popular trend, be sure to review and assess whether it’s the right choice for you.

What is a Colocation Data Center?

The term colocation is often synonymous with data centers. This essentially means that there are multiple servers and various other equipment owned by different companies all stored in one data center. The data center may be configured solely for colocation services or may back up other data systems for other companies as well.

Why Data Center COLOCATION?

Simply put, data centers are a quick and robust way for crypto miners to get online and become operational as fast as possible. Data center colocation facilities can fulfill power, space, and cooling requirements in order to be completely operational. Cryptocurrency mining in general requires a large amount of electricity, but does not require the same levels of redundancy as a regular data center.

Additional benefits of data center colocation can be:

Reduced Costs: When it comes to owning and operating your own data center facility versus paying the costs of a colocation, the overall costs will be far lower in comparison. Depending on your contract set forth with the data center, it can also ensure that you’re paying a flat rate and you’re able to easily anticipate any costs associated with your crypto mining operation.

Reduced Overhead: When operating via a colocation facility, less staff will be required to conduct regular operations. There is also the possibility of setting up a contract that has the colocation facility’s own on-site staff of technicians to handle general maintenance, including parts or components. Additionally, a colocation center removes the need to own or rent your own property and setup processes for hosting cryptocurrency miners.

Redundancy: Data centers are generally built with redundancy in mind. Data centers play a vital role in many business operations, including data transmission, file or record keeping, and communications. Data centers are designed to keep your servers up to prevent any losses of corruption of data via backup power sources such as backup generators. When it comes to cryptocurrency mining, redundant data center colocations can ensure that your equipment is constantly up and running to keep operations running smoothly.

Challenges of Data Center Colocation

Before heading off and looking into data center colocation sites to start your cryptocurrency mining operations, be mindful of these challenges that may determine your ultimate site selection decision. While data centers are a seemingly robust solution right out of the box, there are important factors to consider that may result in looking for a better site or method to successfully operate your cryptocurrency mining operations.

Power

The greatest challenge for looking into data centers colocation for cryptocurrency mining is power. Power is one of the single greatest challenges in effectively operating a data center colocation for crypto miners. Crypto mining operators generally need cheap power rates per kilowatt hour and even cheaper rates when running operating at full load. Data centers that rely on backup generators during times of power loss due to power outage often rely on backup generators to maintain operation of servers, cooling, and other key systems. This cost can then possibly be passed on to you and included in your contract.

Location

Local climate also plays an important role when selecting a data center or site for cryptocurrency mining operations. Crypto mining machines generate large amounts of heat and require adequate cooling to continue running efficiently. This requires a large amount of power to maintain the cooling systems. In areas that experience cold seasons, crypto mining operators can leverage the colder weather as an additional means of heat dissipation, depending on how the data center operates.

Necessity

While data centers are known to be built with redundancy in mind, there are actually different tier levels of data centers that are determined by need. For example, tier 1 data centers have no redundancy, whereas a tier 4 data center will have complete redundancy. Depending on the data center, tier can greatly affect cost. There is a huge difference in cost between a tier 1 data center and a tier 4 data center. Even tier 2 or tier 3 data centers can have an average cost difference of $650 per square foot. This is due to the amount of redundancy set in place for each data center tier and costs associated with building & maintaining that redundancy. When considering a data center colocation, be sure to keep this in mind before making your decision.

More information on data center tiers can be found here: Backup Generators for Data Centers

Redundancy

As explained in an earlier point, cryptocurrency mining requires large amounts of power and data centers are no different. A majority of data centers rely on large commercial generators to backup the facility and all the servers when experiencing power loss due to power outage.

When dealing with a colocation data center, if the facility is relying on these backup generators on-site, then you may be paying the premium for this redundancy. This is due to the fact that backup generators are mainly used to keep the servers, cooling systems, and other key systems running 24 hours a day, 365 days a year. Backup generators that are big enough to meet power requirements for data centers are often costly to acquire, install, and regularly maintain. This cost may then be handed down to you in part.

If you can afford to be offline or out of operation for 24 – 36 hours a year, then the cost of a certain data center’s redundancy measures may not be the right fit for your needs and could possibly even be considered an unnecessary expense.

Conclusion

While backup generators are vital for data centers, it may not be the right fit for your crypto mining needs and colocation may be out of the question. Data centers that revolve around redundancy and employ backup generators to help maintain redundancy can greatly affect your cost and ultimately your bottom-line. Be sure to assess the pros and cons and see if the cost vs benefits are right for you.

If you’re a data center operator looking to ensure redundancy with backup generators or looking to backup your data center facility for greater redundancy to open the channel for colocation opportunities for cryptocurrency miners, please reach out to us at Woodstock Power Company!

Give us a call or send us an email: 610-658-3242 or sales@woodstockpower.com

Additionally, you can fill out our Contact Form with any questions or inquiries and our representatives will get right back to you.

THE WOODSTOCK POWER COMPANY EXPERIENCE

We have industry experts that focus on commercial generator sets, with in-depth industry knowledge to help you choose the right generator that fits your needs. We are experts in providing generators for data center backup power needs, as well as data center decommissioning services.

We are industry leaders in buying and selling used generators to fit the needs of many businesses, including commercial, industrial, medical, agricultural, and university. This includes facilities like hospitals, better living centers, nursing home, airports, hotels, resorts, restaurants, retail centers, manufacturing, production, and more.

Our experts are ready to assist you from answering any questions you may have about power generator sets to helping you find the best selection in our inventory based on:

  • Peak & Average Power Requirements
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  • Portability & Stationary Power
  • Prime & Standby Generator Requirements
  • Available Space & Exhaust Restrictions

We carry only the most top rated new, used, and surplus power generator sets for sale, providing you with a great value generator that will fit your budget.

Our generators have been thoroughly inspected, serviced, and verified, which ensures that you will be buying a quality generator that you can depend on. If a generator is not up to par with industry standards, we make all necessary repairs or modifications, and fully test every generator before we sell. This ensures a full turnkey generator that’s ready to fire up and go!

Due to our wide selection of generator sets, we’re confident that we can find the model that best suits your operational needs and budget.

We also buy used generators in good quality, if you have already upgraded and you’re looking to sell your older model.

Feel free to contact us with any questions, concerns, or inquiries to learn more about the Woodstock Power Company experience and the quality level of products & services we provide.

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