Hive Deploys Intel's Bitcoin Chips, Earns Millions by Lowering Power Use

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Cryptocurrency mining company earns profit by mining less Bitcoins.

Intel Materials on Blockscale
(Image credit: Intel)

Cryptocurrency mining company Hive Blockchain said this week it had begun to deploy 5800 Intel Blockscale accelerator-based BuzzMiner mining systems that it designed itself. To date, this is the first large-scale deployment of Intel-powered mining machines. Also, the company disclosed that it earned $3.15 million in December by lowering its power use and, therefore, the number of Bitcoins it mined, reports CoinDesk. 

Hive constantly optimizes its hardware to improve efficiency and lower power consumption. Late last year, the company ordered the production of 5800 Hive BuzzMiners — cryptocurrency mining machines that it designed itself based on Intel's Blockscale custom ASICs. So far, the company has received and installed 1423 of these machines and shipped 987 systems to Sweden, where they will be installed by January 15. The remaining systems will be tested and shipped by the end of the month. In addition, Hive plans to replace older ASIC and GPU-powered mining hardware with its own BuzzMiner machines. Meanwhile, Hive appears to be the largest buyer of Intel's Blockscale chips.

Also, the company recently procured 3570 Bitmain S19j Pro miners, 2050 of which have been installed already. 

Hive mined 213.8 Bitcoin in December using ASIC and GPU hardware, which equaled 113.2 Bitcoin Per Exahash. Meanwhile, the cryptocurrency mining company earned $3.15 million in income from its energy price hedging and grid balancing strategy. It essentially means that it did not mine when the demand for energy was high. Instead, it sold electricity back to the grid.  

An interesting fact is that Hive's production was down by about 20% month-over-month in December. Meanwhile, the company’s grid balancing strategy and selling electricity back to the grid more than offset declines in cryptocurrency mining.  

Cryptocurrency mining got significantly less profitable in recent quarters due to lower demand for Bitcoins and because it got harder to mine cryptocurrency, which is why Hive and its rivals must improve their efficiency to stay in business. 

"Our technical team has updated our software stack which monitors the vital statistics of our global fleet of ASIC miners," said Aydin Kilic, president & COO of Hive. "This allows us to have great insight and granularity into the performance of each machine, using bespoke API calls, as we carefully study the overall fleet efficiency (in Joules per Terahash), to ensure we are mining for maximum profitability during a Bitcoin bear market. We continue to strive for excellence, ensuring that as we scale our hashrate we also optimize our uptime, to ensure ideal Bitcoin output figures and leading the sector in performance."

Anton Shilov
Anton Shilov
Contributing Writer

Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.

12 Comments Comment from the forums
  • TJ Hooker
    Thr Hive press release mentions profits from energy price hedging and grid balancing, but they don't seem to describe what those are anywhere.

    I'm guessing energy hedging is something like energy futures trading (not sure if actual electrical grid energy futures are a thing, or if it'd just be natural gas or something). The Toms article mentions selling power back to the grid as part of grid balancing, does Hive have their own generators? And/or major batteries that store power during cheap hours and sell back during peak hours?
    Reply
  • DerKeyser
    Excellent example on why our world and livelyhood is going down the drain. These guys are thashing our environment producing absolutely nothing— they are responsible for MASSIVE pollution by excessive electronics production for no good, and then there’s the energy expenditure….
    In the mean time they are massively driving up energy costs up for us common people - both because of their excessive unescessary usage of power, and in the offhours by adding cost to the general energy cost by cornering the marked by bying cheap because of volume, and selling higher (adding empty costs)….

    Will we ever learn?
    Reply
  • Fates_Demise
    DerKeyser said:
    Excellent example on why our world and livelyhood is going down the drain. These guys are thashing our environment producing absolutely nothing— they are responsible for MASSIVE pollution by excessive electronics production for no good, and then there’s the energy expenditure….
    In the mean time they are massively driving up energy costs up for us common people - both because of their excessive unescessary usage of power, and in the offhours by adding cost to the general energy cost by cornering the marked by bying cheap because of volume, and selling higher (adding empty costs)….

    Will we ever learn?
    Except they are producing something, they produced a service for bitcoin transaction data. The exact same thing that your bank does every time money is moved.
    The only difference is bitcoin is a singular worldwide currency while your others have transaction fees to interchange and move.
    Reply
  • DerKeyser
    Seriously, how can you not see that bitcoin has failed long ago? It’s not sustainable to keep driving energy usage up. I’m not intirely against cryptocoins - it’s an interesting concept, but to survive/be usable, step number one is to get rid of the mining thinking. Step number two is to agree on a few sustainable cryptocoins and kill of the others. It’s just MASSIVE misappropriation of ressources At a time where the world is struggeling as it is. Trust me, the economy and environment will get WAY worse in the next year or two. Lets just hope that we all learn from it.
    Reply
  • USAFRet
    "Earns $" vs "Did not spend as much $"
    Reply
  • bit_user
    Fates_Demise said:
    Except they are producing something, they produced a service for bitcoin transaction data. The exact same thing that your bank does every time money is moved.
    Crypto is very inefficient and doesn't scale well. It's also not as cost-effective as conventional ways to move money, in the vast majority of cases.

    Its biggest value-add is for criminals and tax evaders.
    Reply
  • TJ Hooker
    bit_user said:
    Crypto is very inefficient and doesn't scale well. It's also not as cost-effective as conventional ways to move money, in the vast majority of cases.

    Its biggest value-add is for criminals and tax evaders.
    Yeah, or if it is scalable/efficient it tends to be centralized, defeating the purpose of cryptocurrency.

    The Cryptocurrency Trilemma: Scalable, Decentralized, Secure. You get to pick (up to) two :p

    I do still have a tiny bit of optimism about cryptocurrency though, that one day it may become useful for something more than speculation, gimmicks, and crime.
    Reply
  • bit_user
    TJ Hooker said:
    I do still have a tiny bit of optimism about cryptocurrency though, that one day it may become useful for something more than speculation, gimmicks, and crime.
    I agree. I'm not ready to write off the idea, entirely. I just need to see a more scalable solution than blockchain, for starters.
    Reply
  • Fates_Demise
    bit_user said:
    Crypto is very inefficient and doesn't scale well. It's also not as cost-effective as conventional ways to move money, in the vast majority of cases.

    Its biggest value-add is for criminals and tax evaders.

    You say it's inefficient but have you actually found data showing the power consumption of the massive amount of computers that are used for transaction and verification for banks?
    Then once you find that data compare it to the actual security level of bitcoin. Most banks don't come even close to the security level of a bitcoin wallet or the blockchain.
    Reply
  • bit_user
    Fates_Demise said:
    You say it's inefficient but have you actually found data showing the power consumption of the massive amount of computers that are used for transaction and verification for banks?
    Running simple bank-transfers uses trivial amounts of power. They could do this stuff for like 30 years, whereas crypto still is nowhere near the transaction volume of banking and already takes the amount of power of a small or medium-sized country.

    Fates_Demise said:
    Then once you find that data compare it to the actual security level of bitcoin.
    The blockchain might not have been hacked, but exchanges have. Or gone bankrupt, like FTX.

    Fates_Demise said:
    Most banks don't come even close to the security level of a bitcoin wallet or the blockchain.
    In the USA, and probably most other countries, the government provides insurance for bank deposits (e.g. FDIC). So, even if the bank gets robbed, you can still get your money back.

    That doesn't apply to most investments, however.
    Reply