Blockchain and Colocation


When cryptocurrencies, and specifically Bitcoin, catapulted into mainstream society from the shadows of the internet in 2017, everyone was talking about the potential applications for blockchain technology to change the world one industry at a time. Cryptocurrencies skyrocketed in popularity because of their decentralized nature. Thanks to blockchain technology, cryptocurrencies are immune to counterfeiting, don’t require a central bank/ authority, and are protected with complex and secure encryption algorithms. So, does blockchain technology have a place in colocation and data storage? Does cryptocurrency require colocation (see our Houston colocation services) services? To find out, continue reading below.


What is blockchain technology?


blockchain and colocation

Blockchain technology is used to store information. A blockchain is a list of records that store data publicly in chronological order. These are referred to as blocks. The information within the blocks is encrypted using cryptography. Data on a blockchain network is not controlled by a centralized authority, like a financial institution. Instead, the participants of the network maintain the data and hold the authority to approve the transaction. Because of its decentralized nature, blockchain technology is viewed as democratic.



Are there practical applications for blockchain technology in data storage today?

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When blockchain technology first burst onto the tech scene, it was said to have a seemingly infinite number of applications across multiple industries. Originally, it was thought that blockchain technology could enhance data center security, enable better capacity planning for infrastructure, and deliver more reliable data backup. Today, we know that many of Blockchain’s potential technological applications have yet to come, but the future is bright.



What role does colocation play in the crypto world? 



Even though many of Blockchain’s practical applications, as they relate to data centers, have yet to come to fruition in terms of tangible technology, colocation plays a vital role in the crypto world. Plenty of companies use colocation facilities to run blockchain workloads. Cryptocurrency mining consumes an incredible amount of energy, and it requires compute-intensive applications that need far more power per rack than average applications. Bitcoin mining consumes 91 terawatt-hours of electricity annually. Additionally, Bitcoin uses nodes, which are systems of interconnected computers that share information on a peer-to-peer network. Bitcoin nodes are often deployed in regions where data centers are located.


Crypto and colocation have gone together since the early days of Bitcoin. Starting in 2014, many colocation centers accepted Bitcoin in order to attract the business of individuals and companies in need of colocation space for running blockchain mining operations. Blockchain mining’s high energy consumption makes it an ideal candidate for colocation. Additionally, in colocation facilities, Bitcoin miners wouldn’t have to concern themselves with noise and heat disruptions. Blockchain miners would also benefit from the relatively low energy costs allocated by the colocation provider.


While the potential for Blockchain technology within the data center industry has yet to be reached, the need for colocation (see our Dallas Colocation Services) within the crypto world remains present. Colocation services from Thin-nology are suited for a variety of technologies and businesses, including crypto entrepreneurs, from small-scale bitcoin miners to meme coin creators and beyond.

To find out more about our colocation services, click here.