The convergence of Artificial Intelligence (AI) and Blockchain Technology is revolutionizing industries, paving the way for innovations and opportunities. Integration of AI with blockchain enables a decentralized AI ecosystem, laying the foundation for a new economy powered by decentralized computation. The rise of AI has created an unparalleled demand for high-capacity computation facilities, creating the need for new data center capacity. Bitcoin miners who already have access to large-scale computation capabilities and infrastructure required for data center operations are poised to gain huge benefits from this. In this article, we will deeply analyze how AI hosting impacts Bitcoin miners.
Key Takeaways
- Bitcoin miners with large infrastructure and capabilities are in a prime position to earn revenue from their assets by meeting the demand within the AI and HPC data center market.
- AI hosting assisted artificial intelligence applications in providing tools, resources, and infrastructures for developing and managing AI models and algorithms.
- The reliable and consistent revenue offered from AI hosting attracts Bitcoin miners with the right assets.
What is AI Hosting?
AI hosting is a form of web hosting that assists artificial intelligence applications in providing tools, resources, and infrastructures for developing, managing, and deploying AI systems and algorithms. AI hosting enables large storage capabilities, enhanced security, and high-performance computational power to increase AI-driven projects’ efficiency and performance.
How do Bitcoin Miners Benefit from AI Hosting?
Bitcoin miners typically mine their coins in two ways, either using proprietary mining where they utilize their own machines for mining, or using hosted mining in which the miner owns only the machine and deploys them at other miners’ sites.
The Bitcoin miners who act as hosts can access large power contracts at more favorable rates without the need to procure new mining machines themselves. The hosts sell their additional power and space to needy miners for a small markup. This allows Bitcoin miners to expand their businesses.
Strategic Shift Towards HPC
HPC or High Power Computing allows miners to repurpose data centers and power sources to enhance the performance of AI-driven work models, creating an opportunity to earn income beyond mining.
Bit Digital, a Bitcoin company that synergizes high-performance computing and Bitcoin mining is transitioning to a data center enterprise to host HPC clients, offering stable fees and potential upside.
A popular Bitcoin company, Terawulf has created a new HPC agreement to expand to over 100 megawatts of capacity to meet the demand for AI research needs. The HPC services will generate large revenues, depending on the data center configuration and contract size.
Though the above scenarios showcase advantages for Bitcoin miners, the uncertainty in regulations related to federal spending and energy policy may outweigh the advantages.
However, with the victory of Donald Trump in the US election and his friendlier approach towards Bitcoin and the whole crypto market, we can anticipate a soar in Bitcoin in 2025.
Consistent and Reliable Revenue
The price of Bitcoin has quadrupled since 2022 and hit record highs, the Donald Trump victory being the major reason for the soar. However, many miners believe that converting existing data centers as AI hosts offers more stability in the long run.
Many companies that own mining facilities have received inquiries for AI hosting, aiming to secure large-scale power capacity. The companies have offered to cover the capital cost required for converting existing facilities.
The main advantage of AI hosting is that hosts get stable and reliable revenue without being affected by the volatility of Bitcoin. The energy required for AI and crypto mining has led to the partnership, claiming the energy from data centers will double by the end of the decade, with AI being the major factor.
The Strong Push to AI Hosting
AI hosting accelerated in early 2024 when Core Scientific (CORZ) signed a 12-year multimillion-dollar contract to supply 70 megawatts of power to CoreWeave, an NVIDIA-backed hyperscaler. Followed by Core Scientific, many Bitcoin miners like Hut 8 Corp (HUT), Hive Digital (HIVE), Bit Digital (BTBT), and Terawulf (WULF) have launched hosting services.
Crypto mining utilizes ASICS processors, which are made for specific applications, making it less flexible. AI training models require High-Performance Computing (HPC), which facilitates a large number of tasks simultaneously. The swapping up would require a partnership with a hyperscaler and would need additional investment for infrastructure. However, the revenue offered is high compared to the infrastructure cost, especially with the promise of hyperscalers to cover the capital costs for conversion.
Final Thoughts
AI hosting can help Bitcoin miners in financing infrastructure investments by utilizing the revenue generated from hosting the services. The bitcoin market is highly volatile and subject to market conditions, AI hosting enables hosts to earn income without being affected by the market conditions. Many analysts believe that AI is likely to revolve around hosting services by 2025 and Bitcoin miners would make high benefits from them.