03 Feb 2014 / Tech Week Europe – During a panel session at the Open Compute Summit on 29 January in San Jose, California, celebrated Internet browser pioneer turned venture capitalist Marc Andreessen explained why he’s bullish on the Bitcoin cryptocurrency, as well as the hardware that will need to support it.
New Bitcoins are created by way of a compute-intensive process known as mining. “Bitcoin mining is the heart of Bitcoin, which is all the computation that is done to maintain the trust network,” Andreessen said. “The press reports on mining as a waste of time, but in reality it’s all the proof of work computation that makes a distributed trust network work.”
Mining improvements
Andreessen said that, in the long run, a distributed system such as Bitcoin is certainly an alternative if not an outright replacement to centralised entities like banks and stock exchanges.
“There is a very big thing going on now with mining that we’re in the very early stages of,” Andreessen said.
Efforts to improve Bitcoin mining are now under way, working under the basic assumption that the cheaper you can mine Bitcoins, the more money you can make. Andreessen said that at his venture capital firm, Andreessen Horowitz, he is seeing business pitches for Bitcoin-optimised data centres.
The Bitcoin phenomenon is resulting in chip design innovation as well. “There is a big opportunity to apply custom silicon to mining,” Andreessen said. “We’re seeing a new wave of chip design around it, which is not something I would have predicted a year ago.”
While mining operations can potentially be done on general-purpose chips, Andreessen stressed that Bitcoin mining is much more efficient on custom, specialised silicon.
“Mining is a very specific thing that you can highly parallelise,” he said. “So I think that custom mining chips will dominate for quite a while.”…. Read more
