Quote from: ghdp on September 15, 2014, 08:41:14 AM

Quote from: blunthammer on July 26, 2014, 12:44:49 PM

I have been in the data center business for 20 years and there is another way to look at this as a business...
(...)

There is one important difference between a professional data center and a "mining" data center, that can make the second one an order of magnitude cheaper : reliability.

A professional data center has contracts with clients who want an uptime for their servers that stays as close as possible to 100%.
This means :
- double entry of electricity plus local backups (batteries + fuel generators),
- Internet access with very high availability and bandwidth,
- 24/7 surveillance by qualified teams,
- active cooling,
- good fire security.
In those datacenters, a downtime of one minute is a financial trouble, a downtime of one hour is a disaster.

On the contrary, a mining data center can run :
- on a single electricity line, with no backup,
- over a single ADSL router,
- with passive cooling,
- and basic fire security (just to be sure that in case of fire nobody is killed)
A mining center can be shutdown in seconds in case of problem, for a few hours or a few days if needed, and the only cost will be a "loss of opportunity".

The photos of the "chinese mine" that were posted last months shows something that has nothing in common with the first world datacenters that I have know of.

If the ultimate goal is the adoption and proliferation of BTC as a currency, then it needs to be treated like one in some regards. Ghetto colo or circus colo while OK when no one cared or was watching is one thing. To bridge the chasm between BTC as a Ponzi scheme, fad, or other such connotation it will take appearing like that which people think of. Do you want your fiat currency in a secured place like a bank or garage in a ghetto?

As it relates to power, there are a number of Utilities that have been around for over 100 years who are investing in real infrastructure using real money (BTC or fiat) that needs to be paid for over time. If a utility has to spend $25M to deliver 100MW and a miner only wants a 5 month contract, good luck. The banks and financiers that underwrite these deals buy risk. Short term contracts that back a $25M spend means there is less time for the bank or lending entity to make money back. So for a $25M nut, the bank will expect a 10% return so the tab is $27.5M that needs to be paid back in 5 months or at least the replacement value needs to be recouped in the 5 months. Few utilities will take on that much risk for a 20 year contract with unknown entities that set up facilities that are lawsuits and fires waiting to happen. They see it as never getting paid pack.