Bitcoin miners are racing to deploy cooling systems that use liquid instead of air

The geography of the bitcoin mining network is shifting — and so is the race to find an edge over the competition.

At a high level, these two trends are occurring independent of each other. But on the ground in Texas, they are coming together. That explains why a technique called “immersion cooing” has become such a hot topic in the mining community.

First, the geography: the US has replaced China as the new global center for bitcoin mining.

Second, the race to find an edge: incremental advances in the mining chips are getting smaller and smaller, so miners are looking for ways to make chips more efficient without changing the chips themselves.

“Miners are hitting a wall. They're hitting a wall on chips,” Justin Podhola, the CEO of immersion mining technology company Elite Mining recently told The Block. “People are scrambling to find solutions to be able to be the most efficient best in the market so they can remain relevant.”

Add it all up, and miners are eager to find new ways for dealing with the heat.

'A no-brainer'

Cooling computers by immersing them in liquid is not a new approach. Some of the first supercomputers relied on liquid cooling to prevent chips from overheating. But only in recent months have energy-intensive bitcoin miners turned to the approach for large-scale projects. 

It is not a coincidence that at the same time there has been a large influx of bitcoin miners into Texas. After China cracked down on the industry last year, Texas has become a popular region for miners looking to set up shop. The state has already accumulated about 1.5 gigawatts electricity capacity devoted to bitcoin mining, a number that is expected to grow to five by the end of 2023 according to an estimate by the Texas Blockchain Council. 

That means that now many miners are contending with Texas’s intense heat and humidity instead of the cooler conditions in China’s old mining hubs.

Mining machines are particularly susceptible to overheating, humidity and dust. Conventional air cooling systems leave the machines exposed to these harsh elements — as well as vibrations from the fans. Immersion cooling can protect the chips from all of those conditions.

“Texas for us it was a no-brainer,” Peter Wall, CEO of publicly-traded mining firm Argo Blockchain, told The Block. Argo expects to deploy 200 megawatts of immersion-cooled-mining capacity at its Helios facility in Dickens County, Texas, by the end of the year.  

The process entails submersing the machines in tanks filled with a non-electrically conductive liquid that cycles through large heat exchangers. Instead of moving air through the machines, it involves moving fluid that is pumped out, cooled and finally returned to the tanks.

Argo would not reveal specifically how much the method improved efficiency, but Wall said that the company would expect an “uplift of 25% on the immersion side” while “overclocking” the machines — essentially, running mining chips at a higher speed than the manufacturer recommends in order to get more hash rate out of them. (Wall also clarified that numbers may vary widely throughout the year depending on the temperatures and the company has only recently started running some of their first immersion-cooled miners.)

While the upfront investment in equipment is higher than the standard air cooling system, miners say that it allows them to not only to get more hash rate out of each mining chip, but also to prolong the machine’s lifespan and reduce the maintenance required along the way. 

Argo’s rival Riot is about halfway through building 200 megawatts of its own immersion-cooled mining capacity at its facility in Rockdale, Texas. 

“It costs more but those benefits are certainly worth it,” Riot CEO Jason Les told The Block. “When we made this expansion plan, we were obviously making a big bet that we would be successful at doing an immersion.”

In Rockdale, Riot decided to cool half of its rigs in immersion and the other half with conventional fans — only because it could not source enough equipment for immersion, according to Les. However, the company has decided to use exclusively immersion cooling in a newer facility in Texas that could reach up to a gigawatt of capacity. The first phase of the project is 400 megawatts by July 2023.

“Going through the experience we realized how beneficial this is,” Les said. “And we got better at doing it, so now we are much more confident doing it at a larger scale.” 

According to Les, Riot has found that it costs roughly $200,000 more per megawatt to use liquid cooling instead of air cooling. A typical air-cooled system costs around $300,000 per megawatt. 

Still, according to Les, given the “incremental hash rate you're able to get with using immersion, it can be cheaper than if you were just buying that hash rate new on your own.”

Les added: “Not only are you getting that hash rate cheaper, you’re getting it right away — you’re not ordering a machine and waiting nine months.”

Riot would not reveal exactly how much more hash rate it has added using liquid cooling. Instead, Les referred to numbers from Bitcoin mining software company Braiins, which he said show that a conservative estimate implies an additional 25 terahashes per second (TH/s) out of a Bitmain Antminer S19j Pro, one of the most common mining chips available. This model’s hash rate is advertised as 100 TH/s. 

Miners look at cost in dollars per terahash. Whereas a new S19j Pro would cost around $50 to $55 per TH, adding that same amount of hash rate by overclocking machines with immersion cooling could only be around $30 per TH, according to Les.

No playbook yet

Besides the harsh conditions in Texas, another thing driving the deployment of immersion cooling is that the cost of the technology has gone way down in the past few years. 

According to Elite Mining's Podhola, whereas back in 2017 and 2018 one megawatt worth of equipment would be around $1.5 million, that cost is now between $850,000 and $900,000. “Bitcoin accelerates the competition in the space for everything related to it,” he said. 

That trend has also coincided with the increasing popularity of placing mobile operations in remote locations, from windmills to solar panel fields and gas flaring plants.

“A lot of those guys are right now looking for some edge,” said Tomaz Buk of DCX, a liquid cooling company. “With immersion cooling, you can save a lot of human manual work — you can close the container and that's it. When it's air-cooled you have to have the staff locally.  It also requires inspection, cleaning … it's a constant process.”

But despite all the theoretical advantages, immersion cooling is still a relatively new technique for bitcoin miners — and the industry has yet to establish any standards or best practices for building large-scale facilities.

“It requires engineering skill set and expertise that very few miners out there have right now,” said Les.

Riot has done as much as possible in-house, sourcing everything from tanks, pumps and dry coolers and then assembling them on site. Sometimes those parts have arrived with a slightly wrong fit. Les said that’s where it is helpful to have a team ready to tweak them so the firm doesn't have lose time shipping them back to have the adjustments made.

Argo examined the market of immersion mining but wasn’t thrilled with what was available out there, Wall said. Instead, the company decided to build its own system, like Riot has.

Other public miners have also started to look into immersion cooling. Marathon said earlier this year that it had “bolstered” its technical team to research immersion and other solutions that could “optimize the performance” of its mining fleet. CleanSpark plans to build 20 megawatts of immersion-cooled mining at its Norcross facility, in Georgia. So far, it has completed phase one (8 megawatts).

A spokesperson for CleanSpark told The Block in an email that the company is already seeing advantages to the technique. “It’s not just the life of the machine that is longer, but the competitive life of the machine,” the spokesperson wrote. 

They added: “For example, some operators continue to run older-generation machines because they are immersion-cooled, which makes them still profitable to run even at today’s current difficulty and margins.” 

Riot’s Les is convinced that immersion cooling will eventually become the standard. Running the machines in a more stable environment will provide benefits anywhere —  not just in hot climates like Texas, he said.

“I think immersion is the future of Bitcoin mining I think in a few years from now everything, all Bitcoin mining infrastructure will be built out by immersion.” 

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