The Cloud and Cryptocurrency

by | Jul 9, 2018 | Blog

As an AWS certified cloud solutions architect, one of the things I am regularly asked is “Can I mine Bitcoin on AWS hardware?”

My response is always “Absolutely, but you’ll end up losing money!”

For those who do not know, Bitcoin mining is the process where Bitcoin transactions are verified and added to the public ledger (through blockchain, which we’ll talk about later). Miners compile recent Bitcoin transactions into blocks and then by solving a computational puzzle using special software. Whoever solves it first gets to put the next block on the chain and earn the ensuing rewards.

Due to the nature of Bitcoin, the rate of creation is adjusted and decreased periodically, the result being that it is now impractical to mine for coins using regular computers and Graphics Processing Units. This means that even if Amazon were to use all of its AWS EC2 hardware to mine for Bitcoin, it would end up spending more money on energy than it would make back in Bitcoin.

A far more profitable approach for Amazon is to let others mine for Bitcoin using AWS services and earn money from the hardware usage fees. Customers do the work, and the host gets a take. It’s not only profitable, but a better use of time and resources.

Obviously, there are many more forms of cryptocurrency out there than just Bitcoin and some of them might also be suitable for mining on AWS infrastructure, but the field is constantly evolving and changing every day.

However, there are other ways to use AWS for cryptocurrency purposes. All cryptocurrencies use a blockchain, which is a decentralized database technology that maintains an ever-growing set of transactions. It’s effectively a digital ledger that publicly records transactions chronologically, securely using encryption and all transactions can be independently verified. Some see the blockchain as a new monetary system that will change the way we use currency, others see it as immutable data source that will change the way we record transactions. Whichever way you look at blockchain, it seems likely that it is here to stay and as predicted in an article I wrote earlier this year, Amazon has recently moved into the blockchain space with the launch of the AWS Blockchain Templates service. This service allows you to rapidly create and deploy an Ethereum (either public or private) or Hyperledger Fabric (private) network on AWS.

It is exactly this kind of innovation that makes AWS such an important resource for anyone involved in IT. Very few of us would have the know-how and ability to launch our own blockchain, but with the help of AWS, anyone can deploy one with just a few mouse clicks.

It isn’t just blockchain that is new on the list of AWS products and services; there have been over 100 new announcements, updates and releases in the last month alone.

This is why getting involved with AWS and earning certification is a great way to kick start, enhance or solidify your career in IT. In the last two weeks I have taken on new clients to assist them with their migrations to AWS in the fields of social media, car leasing, brain wave analysis and, you guessed it, cryptocurrency!

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databasable provides expert AWS Solutions Architect solutions: https://www.databasable.com

This article first appeared on my Simplilearn.com blog page:
https://www.simplilearn.com/the-cloud-computing-and-cryptocurrency-article