How Blockchain Applications are Defining the Value of Compute
Contrary to popular belief, blockchain is actually defining the value of compute and the critical role of multi-tenant data centers.
The other day while at a data center conference, I overheard a rallying cry to colocation providers to open their doors to cryptocurrency miners, stating that they had the “demand” that colo providers were constantly seeking.
While I do believe that blockchain technology already has driven huge growth, and will continue to drive further growth in colocation facilities, the truth is that not all blockchain applications need to be in a data center. Blockchain has created in Bitcoin mining a type of compute that requires neither latency, nor security, nor resiliency. It looks unlike all other computer applications currently in high use. Since the application itself is new, it doesn’t need legacy infrastructure to perform. However, that’s just true of Bitcoin mining, NOT the compute required to run all blockchain applications.
Blockchain has created in Bitcoin mining a type of compute that requires neither latency, nor security, nor resiliency.
There is a whole universe of other applications, already in high use, which will be improved through blockchain technology. Data center services associated with these applications are essential and may require less power redundancy, but will still require the interconnection and ecosystem that only a colocation facility can provide.
As a data center operator, it is our job to not only over-deliver in providing our own services but also to provide easy access to other services. To that end, we need to make sure that our customers are there to stay, and ideally, they should be accretive to our offerings.
Cryptocurrency miners have long been a blemish on the data center industry or at least a distant cousin that no one wants to fully recognize. Data center providers have bristled at the idea of breaking their 2N, N+1 or other standard electrical and/or mechanical distribution models, and the early cryptocurrency miners have bristled at data center pricing. The speed to market, lack of credit quality and clashing cultures have further exacerbated the chasm.
The reality is that if we look at miners as what they truly are, namely computers running blockchain applications, we can see how the evolution of blockchain applications is pushing the boundaries of compute and the value of that compute in different locations. It is my view, that despite aggressive price pressure by miners running blockchain apps (bitcoin, etc.), as these machines run more complex and performance sensitive blockchain applications, interconnected data centers with rich ecosystems of service providers will prove more valuable homes for compute.
Once those applications demand the performance derived from proximity to interconnection and service providers, the customers will be willing to pay.
Therefore, blockchain applications should not be seen negatively as detracting from a data center’s value, but rather positively as defining it. If colocation providers can be flexible to offer reduced power resiliency, in high-density footprints, it will be more readily consumable by blockchain applications. Once those applications demand the performance derived from proximity to interconnection and service providers, the customers will be willing to pay.
At New Continuum, we offer high density, customized resiliency power configurations in a facility with rich connectivity. We believe that our unique combination of power density, the efficiency of service and connectivity provides value to our customers. While many blockchain applications may not require our level of service, we know that many will. Ultimately, we are confident that blockchain technology will further define our value proposition and enhance our overall ecosystem.