What Is A Mining Farm?
A mining farm is a large data center to mine cryptocurrencies. In contrast to mining rigs that could be conventional computers used to mine cryptocurrencies, a mining farm is technically equipped and much more functionally capable.
Mining farms came into existence to solve the increasing problems associated with cryptocurrency mining. As a cryptocurrency network grows and the number of miners of the network increases, the amount of computing required to reach a target hash rate increases. Consequently, the energy and financial requirements of mining increase over time. Mining farms are large structures with many large, high-capacity computers built for the sole function of mining cryptocurrency at a more profitable rate than conventional mining rigs. The productivity of mining rigs is calculated in hashes per second.
Mining farms have their technicalities. They have high energy demands and a permanent, uninterrupted power source. It is reported that Bitcoin mining alone is responsible for over 0.5% of the total energy consumption worldwide. Mining farms usually consider the cost of electricity used to run the facility and consuming far greater electricity than cryptocurrency mined reduces the farm’s profitability. Mining farms can maximize profits if they have cheaper sources of energy or if they generate their power. These large computers also need complex ventilation and cooling systems.
The legality of mining farms varies from country to country. While mining farms are legal in most countries, some countries have a level of regulation for them. Even though Kazakhstan does not allow the use of cryptocurrency as a means of exchange, in 2020, it created laws that require mining farms to be licensed. It also requires mining companies to take permission before importing encryption devices used for mining cryptocurrencies. China was previously the top leading bitcoin miner before its government clamped down on bitcoin mining, recently leaving many miners to flee overseas and allowing the United States to outperform China in cryptocurrency mining.
Mining Farm Example
These are some of the largest mining farms in the world: Dalian in China, Bitfury in Amsterdam, Genesis Mining Farms in Iceland, GigaWatt in Washington, and Linthal in Switzerland. The United States is the top leading country in the world at mining bitcoin. Mining farms also thrive in countries such as Iceland, Canada, Georgia, Russia, and Venezuela.« Back to Glossary Index