Understanding Cryptocurrency Colocation Mining

If you’ve noticed, cryptocurrency mining is evolving at a rapid pace and crypto enthusiasts are entering this new and exciting venture. Of all the digital coins, Bitcoin mining is capturing the attention of more and more people and is becoming hyper-competitive. And with this growing competition, it has become necessary to find a way to ensure a real shot at scoring high cap currencies like Bitcoin.

Whether you’re new to crypto mining or have already mined bitcoin profitably, possibly you’re now looking to maximize your profits. For those who want to expand their operations or generate more profit, colocation is the best option.
If you’re new to cryptocurrency mining, terms like colocation or ASIC miner hosting may confuse you. So, if you’re wondering what mining colocation is, here you’ll find out its meaning and how it can maximize your cryptocurrency mining revenues.

What is Colocation?

If you’re annoyed by the noise generated by mining rigs at home, mining colocation is for you. Colocation is becoming the most preferred option because it helps in boosting the ROI on your mining investment.

Colocation, also known as ‘co-location’ or ‘colo’ is the practice of renting space in a third-party data center instead of keeping servers in-house or in offices. It means you can ‘co-locate’ your equipment by renting space in a colocation center that provides you the building, cooling, power, bandwidth, and physical security. As such, colocation rental allows you to own the physical hardware and rent the required physical space to house it.

With this type of hosting, you can place your server machine in someone else’s rack and share their bandwidth as your own. The data center is constructed to hold servers in racks and cabinets, each of which has connections to the Internet. The center also provides proper power connections and cooling facilities to ensure that everything is running properly.

How it Works

For renting out space in a data center, all you need to do is give your mining hardware to the colocation provider and they will install it in their rack. Moreover, you may also rent a server machine from the colocation provider. The data center hosts the server, provides an IP, bandwidth, and power to your server. The hosting company not only run and maintains the hardware but also ensures the security of both the data and the equipment. Your equipment will be kept at optimal temperature and the colocation provider will ensure protection against equipment failure, as well as guard against theft. Your server will get high-level security as these colocation centers have security guards and biometric access control. In addition to this, the data center provides backups and UPS devices to protect against outages.

In colocation, you can rent a space in terms of ‘racks’ and ‘cabinets’, where one rack unit is 1.75 inches. You can rent space according to your needs and that will determine the cost of hosting. Typically, you have the option to rent full, half or partial cabinets.

Both ASIC and GPU rigs can be set up in a colocation space. And this method of hosting gives you the advantage of having your equipment in a secure facility under the supervision of an IT professional.

Benefits of Colocation

As mentioned above, mining colocation is a great way to outsource the infrastructure and management of your mining equipment. Now, let’s take a look at its benefits to understand why it’s better than self-hosting.

1. Redundant Network, Power, & Cooling

With colocation, you get the benefit of running your mining equipment 24x7x365. These data centers provide redundant power and network feeds while maintaining the right temperature. The data centers use industrial-scale cooling that can cool entire racks at a minimum cost. Also, unlike in-house hosting, a colocation center gives access to higher levels of bandwidth at a low cost.

1. High-Level Security

If you don’t want to compromise with the security of your sensitive data, colocation is the best option for you. These colocation facilities have multiple layers of security which include 24×7 security personnel, CCTV surveillance, digital locks, man traps, and biometric scanners. Also, in an event of any disaster or power loss, the data center ensures to recover the critical data.

1. Convenience

The biggest issue with self-hosting is the noise and heat produced by ASIC miners that can make your home uncomfortable and put a lot of pressure on your HVAC system. But with colocation, you can effectively avoid all such annoyance. The data centers will maintain and configure your servers, free up your home or office space, and improve the cost-effectiveness.

1. More Profit

With colocation, you no longer have to worry about the downtime which is a common problem. The data center employs trained staff to look after your equipment round the clock and fix any issue immediately. You will get protection from power outages and the staff will take care of everything 24/7 which ensures better and smooth operations.