A Fire Took Out A Huge Bitcoin Mining Operation

A Fire Took Out a Huge Bitcoin Mining Operation

It's 2014, and this is what a mining accident looks like. A massive fire reportedly broke out at a Bitcoin mining facility in Thailand last month, devastating all three of its buildings and possibly millions of dollars in hardware. The fire might just be a wakeup call to all the startups trying to mine Bitcoin on the cheap.

Details of the fire are sketchy, though local media reported flames raging through a warehouse full of servers near Bangkok on October 14. This week, a photo of the devastation popped up on the forum BitcoinTalk, which identified the facility as one owned by the mining operative Cowboyminers. According to Coindesk, Cowboyminers are a collective of European expats based in Bangkok.

Both Cowboyminers and Spondoolies-Tech, the company that made much of the mining hardware in the warehouse, have popped up in the BitcoinTalk thread to discuss the fire. It seems like no one was hurt, but the equipment was uninsured, so ouch.

What we still don't know is what started the fire. Spondoolies-Tech commented that the "buildup was definitely not according to US electric code," though Cowboyminers denied that the electrical wiring caused the fire. We've reach out for any additional details.

A Fire Took Out a Huge Bitcoin Mining Operation

A photo of the facility before the fire. BitcoinTalk

In any case, the fire highlights the possible pitfalls for any Bitcoin mining startup. Bitcoin mining's appeal is its relative simplicity -- you just need computing power. But setting up a facility is more complicated than throwing a bunch of hardware together in a room. Every detail of the traditional data centre is designed with cooling in mind, from the placement of vents to the hot aisle/cold aisle layout of the equipment.

And regardless of how the fire started at the Thai facility, it clearly spread, possibly because of a flammable acoustic foam. A traditional data centre would have also had sprinklers -- or in fancier iterations, gas fire extinguishing systems -- that detected smoke or heat early on to minimise the damage. Of course, these systems don't come cheap.

Mining currency may no longer involve people, but it still does involve monster machines -- machines that are very expensive and very destructible. [Bitcoin Talk, Coindesk, Data Center Knowledge]

Image via BitcoinTalk



    I've been trying to get my head around how cryptocurrencies actually work. So far as I can tell, all I have to do is say "This Cootiescoin is worth 1 USD - and you can enter a lottery to get one with the number of tickets dependent on the power of your graphics card"... and then I get real money?

      I think of it as: find a number, (lets say 2000 digits long) that is prime. Here is a list of the numbers already found.
      If you find a NEW number, you get a voucher. The value of that voucher, in dollar terms, depends on what Bitcoin is currently trading at.

      Anything can be worth whatever, so long as there is demand for it. In simplest terms, Bitcoin is an unregulated currency, so people could and can use it to buy and sell illegal/legal goods or avoid bank fees and tax, thats its value okay. Alot of people want Bitcoin to buy and sell, illegal/legal products, or some see value in simply investing in it in the hopes it'll be worth more than what they paid in the future, so as the demand for Bitcoin goes up the price goes up because people know they can sell there coins for more $$ because so many people want it. There's only X amount of Bitcoin to mine (to my knowledge) which means that there worth more in a limited quantity than if there was an unlimited supply. If there was an unlimited supply and everyone could easily get and access Bitcoin it wouldn't be worth as much, Hope this makes sense.

      Last edited 08/11/14 1:00 pm

    I don't understand how Bitcoin mining benefits anyone. People waste huge amounts of electricity to create virtual currency. It doesn't contribute to domestic product and it doesn't create jobs.

    Ok so I get most of how this thing works, but what does the number crunching achieve that then results in value? What's the end result of finding all these say 2000 long prime numbers? Are they complex sums that result in real world solutions or is it just maths for the sake of maths and we attach a dollar value to it, just as we do say diamonds?

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