Preparing for the Future of Blockchain in Data Centers

blockchain in data centers - cryptocurrency data center infrastructure

There have been many stages in history where technological advancements have completely and utterly changed how we live our lives and the opportunities we have access to as ordinary people. In the modern age, we have already built the infrastructure to move great distances at high speeds. The new frontier is in the digital space, and the new ideas here will be the impetus to move us forward. One such advancement came with the innovation of bitcoin and other cryptocurrencies as well as the infrastructure and software layers they run on such as blockchain.

Blockchain technology is in use everywhere today and if often not even seen. Some of the many applications for blockchain include, Smart Contracts, Decentralized Finance (DeFi) , decentralized applications (dApps) and Central Bank Digital Currencies (CBDC), but there are many more and the possibilities are growing and expanding all the time.

How Does the Blockchain Work?

A true revolutionary modern technology, blockchain creates a decentralized record of each transaction or block on the ledger (or the chain), which is sent to multiple locations with computers to create a verification system. Because the blockchain system works this way, two things happen as a result. Not only does blockchain increase access to transparent data on the internet, but it also serves as a form of cybersecurity. The decentralized nature of a blockchain means that a hacker or bad actor would find it extremely difficult to manipulate the data unless they controlled more than 51% of the entire network, something that is increasingly difficult to do. A “false” change in one log will make it invalid when checked against the millions of other copies stored elsewhere around the world.

Creating blocks on the chain can be resource-intensive, but in the world today, cybersecurity and network integrity are paramount. This aspect is why many large companies are funding work on blockchain applications outside the cryptocurrency market. Equally as the resource intensive “proof of work” blockchains move towards “proof of stake” systems, as Ethereum is doing, the technology is becoming carbon neutral to carbon negative. Key to the success of both systems though relies on secure, reliable, and consistent connectivity, power, and other related services as offered today in the data center industry.

Providing Blockchain Infrastructure

The idea is that this investment in blockchain technology will create systems in the future in which blockchains could be used for cloud services as the user base and usage per user increase. This will change the digital infrastructure of data centers which are now used as hosting services for cloud-based systems.

Hosting Cryptocurrency Mining

This change in digital infrastructure will come from the increased popularity of cryptocurrencies and blockchain-based applications. Subsequently, the demand for very high-availability computing capability to reliably and cost effectively “mine” cryptocurrency will increase accordingly. As the popularity of blockchain continues to increase, the need to prepare for the coming storm of blockchains is imperative for data centers and colocation facilities. These locations are already hosting companies that, as this technology evolves, will want to begin implementing it and will need to be ready for the increasing demands for reliable power and high-performance equipment to process the creation and writing of blocks accurately, quickly and efficiently.

The resource intensiveness of a “proof of work” blockchain is because the mining of each block requires a mathematical puzzle that needs to be solved by the computer. This computation requires sufficient power to complete a complex puzzle and demands special attention to the equipment in a data center. To accomplish tasks like bitcoin mining, as we see today, there is specialized high-performance hardware required that can solve the computational algorithms intrinsic in the protocol. For “proof of stake” systems the demands lie in reliability, always on connectivity, ultra-fast and low latency processing and ensuring all systems are available 24x7x365.

For proof of work systems, not only does the hardware need to be state-of-the-art, but there are cooling systems that need to be put in place to deal with the heat that this intense computation will produce. For this, specialized centers and those preparing for the revolution in data usage have implemented immersion cooling systems, a liquid cooling technique for high-density hardware. For proof of stake networks, while they are low power, they still need extremely high availability and consistency in order to operate correctly so the task is no less daunting.

This preparation is essential to be ahead of the technological curve. This is truly the new frontier of information technology. The best way to make sure that you are ready for what may come is to work with a data center provider implementing these advanced technologies today.

One solution to this is to work with Digital Fortress for reliable, state-of-the-art, and secure hosting for the blockchain infrastructure and cryptocurrency mining servers. companies can benefit from the low energy cost and ultra-high performance that Digital Fortress data centers provide.