Data centers and Crypto: Adapting for the future

The following is a guest post from Shane Neagle, Editor In Chief from The Tokenist.

The steady Bitcoin trickle into the mainstream consciousness since 2009 mainnet launch had many cascading effects. First, it served as a revelatory vehicle by exemplifying the nature of money; why it should be outside of central banking, and why fixed supply is important for the valuation of money.

Second, Bitcoin sparked an entire crypto industry, further making the case for decentralized financial services that eliminate gatekeepers in favor of smart contracts enforced by blockchain networks. As this $2.2 trillion sector develops, banks are further poised to lose their role as trusted intermediaries.

Third, data center infrastructure is becoming more important than ever. Whether home-based or as large mining operations, crypto infrastructure needs reliable high-performance computing resources, storage capacity and memory alongside fast networking to maximally reduce blockchain latency.

In fact, data centers are so critical that an entire knowledge field emerged to balance power requirements, cooling solutions, server density and crypto hosting location. When these factors come together, crypto needs to forge an indelible mark on the data center design itself. Let’s explore how.

The Critical Role of Data Centers in Crypto Infrastructure

In the early days of the internet, broadband connection was rare. This necessitated local resources within businesses and institutions to be used for data storage and management. By the end of 2000s, broadband infrastructure had become sufficiently ubiquitous to start supporting cloud computing.

In other words, data centers were being delocalized into remote, scalable, on-demand server clusters. The ability to eliminate on-premise infrastructure and host data and apps remotely drastically cut upfront capital expenditure. Of course, this ultimately benefited Amazon Web Services (AWS), Microsoft Azure and Google Cloud as the data center triumvirate that powers the bulk of today’s digital landscape.

However, securing blockchain networks exerts an entirely new load layer. Because these digital ledgers facilitate real-time transaction processing, between multiple nodes to verify them, extra CPU, GPU power and RAM is needed to minimize congestion and latency.

And if there is a sudden spike in blockchain network traffic, this too requires resource redundancy. This is why both AI and blockchain-oriented data centers have been transitioning from…