The Next Evolution: De-Centralized Data Centers?

LOS ANGELES, CA – When people talk about the intersection of Blockchain and the data center world, quite often the conversation is about what kind of infrastructure data centers need to accommodate data center demand. However, one topic that’s more under-the-radar is how Blockchain might actually become part of data center operations and management.

New SquareCapRE’s Seventh Annual Southwest Data Center Summit: The Telecom Evolution featured a panel titled “Blockchain, Cryptocurrency and Bitcoin: What are They and How Do They Impact Data Center Design, Construction & Development?” which bridged these two broad topics in a conversation between Moderator Adam Waitkunas, President and Founder, Milldam Public Relations & Panelist Ivica Simatovic, Co-Founder of Blockchain Guys.

“Ivica, could you talk a little bit about what data centers need to do to prepare for blockchain from an infrastructure standpoint, in terms of power, cooling and network?” suggested Waitkunas.

“This decentralized protocol of information will impact first security and then everything else. That is something to prepare for,” began Simatovic. “Next would be that most of the mining is done with the GPU. The video cards – these are the most effective. And this is how most of the mining is done now. Of course, there are a lot of “tries” now and the technology itself is still developing. So people are slowly starting to develop their own specialist algorithms, which, they don’t need the GPU. They can use their processing power.”

“So there’s a lot coming up. And you guys [data centers operators] can take a lot of it because you hold the…data access,” he mused. “I believe that critical information is really security. That’s going to be one of the first things that you guys want to look into – to how to create security on a decentralized systems. And what kind of decentralized systems of security you can deploy on top of your platform. Whatever your development plan or upgrade could be. That would be the most critical thing. Because centralized systems are really horrible. Once you hack the system, you’ve entered the system. The damage is done already.”

Ivica Simatovic

However, according to Simatovic, with a decentralized system, you can basically manipulate a local account, but you cannot impact the whole system. “That’s the major difference,” he stressed. “I like to explain that it’s very simple. Because this is a part of the human aspect in us – in exchanging values. This is the first time in human history that we can exchange an infinite amount of value without guns, without the police, without the banks, without the government. No one else is needed between two parties to make that ledger. So that’s one of the critical points to understand. Because it can elevate, dramatically, the whole perception of how far can [a hack] go.”

“A couple of other ideas down the line pertain more to physically preparing data centers to handle the decentralized demand,” he continued. “Because I feel like, from the moment that it arrives, you will become a bank. Rather than a data center. What you hold right now is secure information. But what’s going to come to you is going to be an incredible amount of value. Now, of course, that elevates the security point which I just made, because it’s present.”

“If any of you have been hacked…it’s very enticing. There’s an incredible amount of money out there and there are many parties who want to access it. There are entire gangs in other countries where they just do that as their business strategy,” he intimated. “I was a part of the biggest ICO a few years ago, and I was a direct target. I had 300 daily attacks, just for me, personally. That’s one of the biggest concerns. But the rest is on you, to realize that the data center as it was, is how it was. This is a different time now.”

If you want to prepare yourself for what is coming, you should definitely do your research in how you can secure your information and how you can deploy a decentralized flow, he asserted. “Either with internal value or whatever the real functionality is that you offer on top of that.”

“Everything else is going to be okay – how you’re facilitating the mining crowd and all of that,” Simatovic concluded. “In that sense, you need to know what kind of hardware you need to adopt to that. do you need GPU cards or more processing power, but in general, this whole thing is about sharing data, sharing processing power, and sharing storage. Think of those three things as a complete value.”

For more coverage of this panel, check out an earlier CapRE Insider Report: Why Has Mining Been So Volatile Lately?