
Cryptocurrency miners are renting Boeing 747s to ship graphics cards - z3t1
http://www.pcgamer.com/cryptocurrency-miners-are-renting-boeing-747s-to-ship-graphics-cards
======
chx
This just sounds grandiose but really, renting a 747-400F is not such a big
deal. This [http://www.opshots.net/2015/04/aircraft-operating-series-
air...](http://www.opshots.net/2015/04/aircraft-operating-series-aircraft-
operating-expenses/) article gives a figure of 24-27000 USD an hour. You need
it how long? Ten hours? Twelve?

Using a random card Amazon gives us a box size of 13.4 x 9.5 x 3.1 about 400
cubic inches. Say [http://www.cargolux.com/our-expertise/cargo-
equipment/aircra...](http://www.cargolux.com/our-expertise/cargo-
equipment/aircraft/747-400f-specifications) we have 21 347 ft^3 that is some
36 887 616 cubic inches which means some 92 000 such boxes give or take.

There are inefficiencies etc so let's say it's 30 000 cards. Say at 300 USD
each. That's a cool ten million bucks. The plane likely costs less than half a
mil. It's not a biggie.

But do they really?
[https://motherboard.vice.com/en_us/article/zmemza/cryptocurr...](https://motherboard.vice.com/en_us/article/zmemza/cryptocurrency-
mining-fueling-a-gpu-shortage) says "Enigma started with an installation of
about 700 GPUs and now consists of several larger buildings," Schindler told
me in an email. "Obviously at this size the operation draws attention from the
hardware manufacturers directly and we have agreements with them." Compared to
that I have some doubts they need to fly _thirty thousand_ cards in. Maybe
they rented a pallet in a 747F...

~~~
pmorici
A side business I run supplied them with components in 2016. Based on what I
shipped them I'd say they deployed some where in the neighborhood of 18,000
graphics cards in 2016 and they were supposedly ramping up to go even bigger
in 2017.

I don't have any insight into what they are currently up to because that
scaling apparently involved hiring a eastern European engineer on the cheap to
masquerade as a customer to try and obtain confidential hardware design
details from me so he could rip off my product for them.

~~~
hueving
>I don't have any insight into what they are currently up to because that
scaling apparently involved hiring a eastern European engineer on the cheap to
masquerade as a customer to try and obtain confidential hardware design
details from me so he could rip off my product for them.

Sounds like an interesting story here. How did you out him/her?

~~~
pmorici
It was pretty transparent, almost comically so. My business makes adapter
boards that let large mining operations reuse power supplies from old server
equipment to power their mining operations. Each power supply has a different
pin-out and way to turn it on and off many are proprietary and don't have
publicly available data sheets. I figure out how they work and design an
adapter board with the required logic to operate them safely as a general
purpose 12 volt power supply.

The business operates on a model where the customer pays a minimal fee, $100,
to purchase a prototype of a new design but I retained the rights to the
designs and did all the design, development, and testing on my own dime and
then amortize those costs over the life of the product.

So one day they come to me and say they want to start manufacturing at a
factory they've made a deal with in China and ask me to give them the design
files free of charge. I told them that I wasn't going to just give them the
companies IP for free because a lot of work went into developing it etc... but
that we could discuss what an appropriate price was if they really were dead
set on doing their own manufacturing.

There was some back and forth but their position was that they didn't think
there was anything special about the product and the most they were willing to
pay for access to the design files and a license to manufacture it in
unlimited quantities was $100 per design. I pointed out a number of things
that we did the most important of which was making sure the design and
materials could safely handle the high current loads the boards had to
withstand, etc...

Shortly after I refused their $100 offer as insultingly low I get an email
from some guy purporting to be from eastern Europe and saying he was
interested in purchasing 500 units. Before he would go through with the
purchase he needed to confirm some technical details of the board design
because he was "concerned his environment was very hot and dirty". He then
went on to ask a list of questions including things like what are the number
and thickness of the copper layers in the PCB. These were the exact reasons I
had discussed with the Genesis guys as to why our designs had value. At that
point I was 99% sure of what was going on. So I responded that we didn't give
out those specifics but that we could send him a prototype to test and he
never responded.

To satisfy my own curiosity a little while later I used a personal email
address to send the guy a message saying that a friend had given me his name
and asking if he still did hardware design because I needed some design work
done for crypto-currency related projects. A day later I got a response that
removed any remaining doubt about what was going on.

~~~
hueving
Fun, thanks for sharing. The world of cutthroat SHA calculations. :)

------
rothbardrand
These headlines are annoying and what I consider to be "fake news". -- EG They
are blowing up some factoid or partial fact to make a false impression.

Here's the reality--

\-- Ethereum is going to PoS soon. Even if it doesn't fully switchover it will
decline in profitability for miners quite a bit.

\-- Ethereum is down %50 in the past couple weeks. The GPU boom is over (for
now) and supply should be loosening.

\-- There are just not that many coins out there that are GPU mineable to
support really massive operations, like a full 747 of GPUs. BTC is $45B and
ETH is $18B market cap. As far as GPU mineable coins looking at the top
hundred on CoinMarketCap I see about $2-$3B market cap for them all combined.
You aren't going to take the hash power of securing ETH at $18B and dump it
into ETC and ZEC without thinking twice, and if you do you aren't going to be
shipping 27,000 GPUS in at a time 2 months before you have to jump from your
big pond into those tiny ponds.

\-- And if there were, the labor to bring that many machines up, even if you
already have the physical and electrical capacity is weeks of work, unless
you're employing a very large labor force which you are going to turn around
and fire right after they've built your very cost intensive and valuable and
hard to secure warehouse full of miners.

Reality is, the industry may be buying one 747 worth over the next several
months but they are all getting them a few at at time and constrained by
electrical and physical capacity and labor availability, and parts of
everything else.

At even low scale these are non-trivial issues, when you start building 10
rigs at a time it is at least 10 times harder, 10 times more likely a part is
out, etc etc.

~~~
mrb
You severly underestimate the number of GPUs mining other cryptos. For example
ZEC has half a million GPUs right now (200 MSol/s).

~~~
rothbardrand
I'm not sure what your point is. Do a similar calculation for the ETH
difficulty and there are a lot more GPUs mining ETH....which are going to
crowd into ZEC and ETC. IF you have 10,000 GPUS mining ETH and you have to
move them in a few months, are you going to now be adding another 1,000 GPUS?

~~~
mrb
I was replying to " _There are just not that many coins out there that are GPU
mineable to support really massive operations, like a full 747 of GPUs._ " And
I pointed out that's not true because 1 airplane-load of GPUs represent only a
tiny minority of the mining power of just 1 cryptocurrency like ZEC.

Also you seemed to assume this airplane-load of GPUs is meant for Ethereum,
but Genesis Mining (the miner who rented a 747) already mine ZEC and other
alts.

Finally, I would wager there are probably more (at least as many) GPUs mining
all other coins combined than GPUs mining Ethereum (2 millions or so).

~~~
rothbardrand
I'm assuming most GPUS are mining ethereum and that this will change. (not the
airplane load, I don't think the airplane load even exists)

But you are right there's a huge number of GPUs out there. My main point is
there is going to be a big shift to the others from ethereum when ethereum
becomes less profitable...

------
joezydeco
The 747 is needed because it's filled fore-to-aft with cards? Or just because
it sounds good in an article?

A ticketed courier could deliver a large number of cards just as quick, if not
quicker.

~~~
DrScump

      Or just because it sounds good in an article?
    

Exactly. I bet if you took the cargo capacity (I'm guessing that with any
packaging to speak of, volume would be the limiting factor rather than weight)
of an air cargo configured 747, _months_ worth of Genesis' card consumption
would easily fit in _one_ flight.

That one hyperbole quote generated at least a half-dozen different articles in
this media genre, most of which have been posted multiple times on HN over the
past 4 days.

------
free_everybody
This is great news. I can't wait until people realize that Ethereum is a
largely useless network and GPUs rain down like manna from the heavens.

~~~
isubkhankulov
its useful for conducting unregulated securities offerings and launching
dapps. i just haven't found any useful dapps yet. dapps are mostly used when
you need censorship resistant functionality.

~~~
everheardofc
Most dapps I've seen are literally pyramid schemes or gambling.

~~~
davotoula
[https://prism.exchange](https://prism.exchange)

------
Chyzwar
This is a gold rush[1]. People that were early in BitCoin already cashed, now
profit is made on exchanges and by hardware suppliers. It is even worse than
Gold because you can't just hold when market crash.

[https://en.wikipedia.org/wiki/California_Gold_Rush](https://en.wikipedia.org/wiki/California_Gold_Rush)

~~~
rothbardrand
People who bought at the absolute peak of the last market, where it was for
only an hour or so, are now up %2700 on that purchase in 4 years.

You can hold and you can dollar cost average, and if you weren't buying with
the intention of holding for 5 or more years you weren't really investing you
were speculating and if you're speculating you should be hedged or have a
strategy that can handle a dynamic market.

I know people who were early in bitcoin and they are still HODLing and using
their BTC wealth to invest in other things like ETH and startups.

~~~
hueving
And we're still waiting for tulip bulbs to return to their peak value. Just
because it continued up before doesn't mean it will continue up in the future.

~~~
rothbardrand
The difference is that tulip bulbs were not a new technology with a compelling
use case that keeps reaching wider and wider audiences.

~~~
hueving
In addition to mikechar's sibling comment, keep in mind that the blockchain
technology can still be used for all kinds of stuff even if Bitcoin and
Ethereum completely collapse to zero. They are just specific implementations
and there is nothing particularly unique about them technologically compared
to any given fork of the same code.

~~~
rothbardrand
Your thinking is exactly where I was in about 2012. The network effects is why
bitcoin has remained so valuable in the face of, say, litecoin which is
arguably better technologically.

------
Thriptic
I'm consistently surprised at how tepid AMD's embrace of mining has been. If I
was them and noticed that my product was literally sold out everywhere because
of mining, I would embrace it, open a mining division, and immediately get to
work trying to create specialized hardware optimized for mining.

The fact that they seem to be pretending that this use case does not exist and
stubbornly declare themselves to be exclusively a gaming company is baffling
to me.

~~~
maxerickson
If their hardware is sold out because of mining, all they have to do to serve
the mining segment is make more of that hardware. There is no urgent need to
undercut themselves.

Brief research suggests that the entirety of Etherium mining is roughly
equivalent to 1 quarter of AMDs GPU sales. It seems gaming is the much bigger
chunk of demand (Nvidia sells 3x what AMD sells, so annual gaming sales are
roughly 10x the total Etherium spend).

~~~
literallycancer
Wasn't there a time few years ago when AMD overestimated the demand and then
had 4 times the production capacity idle? It's not exactly cheap to build too.

------
dbcooper
AMD announced the Vega 10 based GPUs today (on sale August 14).

[https://news.ycombinator.com/item?id=14889357](https://news.ycombinator.com/item?id=14889357)

Apparently they are going to bundle most of them with games and hardware
discounts initially, to discourage buy ups by the miners.

[http://www.anandtech.com/show/11680/radeon-rx-vega-
unveiled-...](http://www.anandtech.com/show/11680/radeon-rx-vega-unveiled-amd-
announecs-499-rx-vega-64-399-rx-vega-56-launching-in-august/2)

The RX Vega 56 part has 50% higher SP compute per watt than the RX 580 and 570
(50 SP GFLOP/watt), and is only $399 MSRP.

~~~
rothbardrand
EDIT: I see these bundles are definitely to limit demand on the early cards. I
expect they will keep miners at bay until they start having volume on the
single cards. That's fine.

Single Point calculations per watt or per second are not really the relevant
measure for miners, it's all about memory bandwidth.

We will see how these stack up.

~~~
dbcooper
OK. Memory bandwidth for the Vega 56 part is 410GB/s, vs. 256 and 224 for the
RX 580 and 570 respectively.

~~~
rothbardrand
Right, those are good numbers for the price, comparable to the 1080 Ti, so
this bodes well for using them for mining... however we will have to see if
there are any gotchas (the access patterns for mining are different than for
games, so for instance GDDR5X was less effective than GDDR5 despite being
theoretically faster.)

~~~
dbcooper
Was that due to increased latency?

~~~
rothbardrand
That would be my guess, that the bandwidth was very high but the latency was
higher than the cheaper part, maybe not all the time, but in a way that
affected this hashing algorithm.

------
notjesse
The article title makes Genesis Mining sound like a bunch of amateurs, but
they are a fairly large private company. Ordering express bulk freight for any
company of this size doesn't sound so crazy.

------
throw2016
Imagine all these people wasting time, energy and power, the last of which is
a crime against the environment and an affront to good sense at a time of
global concern.

But when it comes to money, greed and self interest always triumph and there
will be dozens stretching logic and apologism as far as it can go.

'Proof of work' has to the most hare-brained, wasteful, anti-environment
scheme ever thought of. Responsible people should not just be wasting
electricity in this manner.

~~~
KGIII
Yet, here we are - wasting resources to post trivialities online. Their
consumption is generating value, yet our comments are just yelling into the
wind.

~~~
everheardofc
Proof of Work is inefficient by design. The transaction speed of the entire
network is equivalent to that of an average node. Adding more hardware
increases inefficiency.

A centralised service like HN on the other hand could be designed to scale
linearly with the amount of hardware resources.

Edit: Now that I think about it I wouldn't be surprised if someone makes a
cryptocurrency based around "digging holes" keynesian style. I've even found a
name for it: captchacoin.

~~~
KGIII
And our comments are creating no value. We're just ephemerally yelling into
the wind. If the claim is about resource usage, the concern is about value. If
nothing else, they are at least creating value - something we both aren't
doing.

Hell, I don't even expect you to agree with me. I'm just posting to speak my
point of view and amuse myself. This conversation is pretty much the most
wasteful thing we are going to do today.

Real life is less utilitarian than many people wish. Even if our conversation
is more efficient, it generates not one bit of value - at least financially.
It does amuse me, but I'm not really sure that's very valuable.

~~~
Qwertious
>It does amuse me, but I'm not really sure that's very valuable.

That's valuable. It lowers the demand for jetskis and cocaine, at a fraction
of the price. Also, there's not much point in life if being entertained isn't
valuable.

------
ctz
Any actual source for this? (Like a waybill, or customs documents. Not a press
release.)

------
captainmuon
It's a bit sad that cryptocurrencies tend to encourage concentration and
centralisation. It's very hard for an individual to take part and earn if you
"miss the time". And the negative side effects are large, like energy expense,
or selling out of GPUs.

I think this is a general shortcoming of proof-of-work. I wonder if this could
be fixed with a different scheme, e.g. reputation-based, or proof-
of-(something socially desirable and not centralizable)?

~~~
LeoPanthera
You seem to assume that mining is the point of a cryptocurrency, and I don't
think it is. Even Satoshi, when he was still around, predicted that mining
would eventually be out of reach of the normal user.

But you can still "take part" by using it for what it actually is - a
currency.

~~~
taw55
The big problem with cryptocurrencies is that they're really not currencies...

I don't know anyone who would want to use BC for anything other than
speculation. Speculation that undermines the stability of the currency, which
isn't conducive to use as currency.

There are proper cryptocurrencies that don't require mining but they don't
seem to get nearly as much attention.

------
martinald
I'd be surprised if GPUs and CPUs were ever shipped by sea instead of air. 6-8
weeks at sea Vs 12 hrs flight is quite serious deprecation, even if you're not
mining them.

~~~
jdavis703
In GAAP you don't have to do calendar time-based depreciation (assuming you're
dealing with something that doesn't have a finite life, e.g. nuclear fuel
rods). There's also usage based depreciation, so, for example, you only
depreciate the cost of the GPU while the computer is powered-on or the cost of
a truck based on how many miles it's gone.

~~~
umanwizard
I think the point was that due to upgrade cycles being what they are, a given
model of graphics card will be less valuable in actual reality after a few
months at sea; not just less valuable according to accounting.

~~~
martinald
Yes exactly, say you are on a 12month refresh cycle of your GPUs at Nvidia/AMD
- 2 months is nearly 1/6th of that.

AMD or NVidia could 1up them by air shipping, which is very low cost
considering the value per kg of the shipment.

------
aphextron
Is this the real story behind nVidia's insane stock spike over the last year?

~~~
klodolph
Miners use AMD cards because they have better integer performance, unless I'm
mistaken.

~~~
usaphp
I thought they use AMD cards because they consume less power

~~~
dragontamer
NVidia actually consumes less power in most games.

But AMD cards use less power with integer performance.

~~~
jackyinger
This is the reason, Nvidia is good for floating point. Which is why people use
them for deep learning.

~~~
mamp
The main reason is library support. Still no widely supported (or ported)
equivalent to Cuda/CuDNN for AMD.

------
MichaelMoser123
i wonder if these massive mining operations have enough power to cheat the
system: couldn't they quickly compute a series of valid blocks with the
cheated transaction if they band together? the longer chain of blocks would
win against a shorter one.

On the other hand they would have a self interest to preserve the system, if
trust in cryptocurrencies collapses then the big miners would have a lot to
loose.

~~~
rothbardrand
This is a sybil attack and it would take wide collusion and would be difficult
to pull off, and it would allow you to do what? Reverse some transactions that
you had the keys for.

It's really expensive attack to get back the $5 you paid for Starbucks.

So you would want to do it with a multi-million dollar transaction.

However, the thing is, anyone you pay a multi-million dollar transaction to is
going to let it clear for more than just one block... probably for many
blocks...before handing you the goods.

Because everybody is aware of this risk.

Chains reorganize anyway, just naturally when sometimes two blocks are found
within the propagation delay.

Trying to run ahead is very hard.

Wallets like Electrum show one confirmation in red, and several in yellow and
only after the chain has gotten extremely expensive to unwind will it show
them in green.

------
yuhong
It would be fun to buy graphic cards in places where power costs are high and
ship them to where power costs are low.

------
crb
If people are this serious, why don't they just set up their mining operation
next door to the factory?

I imagine the factories are where they are in part because land and power is
cheap?

~~~
gnode
Mining happens where power is cheapest; often near hydropower in agricultural
china. Factories are usually in places with good shipping links.

~~~
dx034
Is electricity there really cheaper than places like Iceland? Aluminium
smelters in Iceland tend to get contracts around $3c/kwh, other large clients
should be able to get the same.

------
readhn
i just cant wait to see when this whole crypto-concurrency gold rush
inevitably collapses.

This is no different from the tulip mania of the 17th century. Yes tulips
still have value today and cost something after all but not the absurd amount
of money they once fetched.

------
abiox
must be nice having the resources to buy that many gpus. do they make money
mining these days?

seems like the average person barely breaks even after paying the home
electric bill.

~~~
jdavis703
If you can get wholesale electric rates (I'm assuming if you're paying
millions to buy and ship graphics cards you know what you're doing), then the
power companies in California will pay you to burn electricity when the sun is
at the highest [0].

[0]: [https://qz.com/953614/california-produced-so-much-power-
from...](https://qz.com/953614/california-produced-so-much-power-from-solar-
energy-this-spring-that-wholesale-electricity-prices-turned-negative/)

------
elipsey
anyone else here sell their gpu? i couldn't resist...

~~~
jagger27
Yeah, I managed to dump an old 7950 for well above its reasonable gamer-
oriented price a few weeks ago but I'm glad I got my RX 480 before the craze.

------
elmar
Another source speakes more of ether.
[https://news.ycombinator.com/item?id=14885294](https://news.ycombinator.com/item?id=14885294)

------
kelvin0
One weird trick to mine crypto-currencies.

