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Topic: Visa’s top-secret Operations Center / Bitcoin is so much cooler & cheaper :) - page 3. (Read 6584 times)

donator
Activity: 1218
Merit: 1079
Gerald Davis
TL/DR version:
If BTC cost is 1000x higher than VISA cost then BTC is dead now, so uninstall the client.  VISA gross profit margin is 28%.  Thus the cost to users is ~4x their cost.  If BTC cost is 1000x higher then BTC ultimate cost to users would be 250x what VISA cost is.  Kinda hard to attract users to that.   The reality is BTC cost is a tiny fraction of VISA once the network is "fully grown".

i think mining will become cost ineffective for the average joe long before that.  i imagine if bitcoin were to grow to these levels, corporate mining will come into play, and most likely exchanges and particularly bitcoin payment processor companies will have a large portion of the mining infrastructure for additional profit, fast proliferation of transactions, and security.

I agree but I mean for USERS.

If the math was right and BTC cost was 1000x VISA cost and visa has a 4x markup then BTC price to end users (non-miners) would be 250x as high as VISA even if miners worked for cost.  That is obviously untrue.
member
Activity: 84
Merit: 10
TL/DR version:
If BTC cost is 1000x higher than VISA cost then BTC is dead now, so uninstall the client.  VISA gross profit margin is 28%.  Thus the cost to users is ~4x their cost.  If BTC cost is 1000x higher then BTC ultimate cost to users would be 250x what VISA cost is.  Kinda hard to attract users to that.   The reality is BTC cost is a tiny fraction of VISA once the network is "fully grown".

i think mining will become cost ineffective for the average joe long before that.  i imagine if bitcoin were to grow to these levels, corporate mining will come into play, and most likely exchanges and particularly bitcoin payment processor companies will have a large portion of the mining infrastructure for additional profit, fast proliferation of transactions, and security.
legendary
Activity: 1190
Merit: 1004
Maybe I'm wrong about this but shouldn't bitcoin mining become more efficient as it scales since more transactions can be put into each block? And the amount of mining power would rely upon the profitability of doing mining so that if the revenues for mining goes down, then that will make it less profitable and miners would leave the scene, reducing the amount of mining power? With more transactions there can be more transaction fees per block.
hero member
Activity: 484
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Forget VISA. I expect Bitcoin to take on the $900 Trillion derivatives market and blow it up a few orders of magnitude.


FUCK YEAH !
donator
Activity: 1218
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Gerald Davis
Yeah the math is off because it is based on VISA scale volume and 8x increase in BTC price.

While BTC may someday be that large it likely will be when subisidies are much lower.  fees will rise but not as much as subsidies are declining.  While the nominal value of BTC in fiat may rise in BTC terms future block likely will be worth much less than 50 BTC.  We will see the first step of that in 2013.  Block subsidy will decline to 25 and while miners may push for higher fees it is unlikely going to be even 10% of the subsidy drop.

So the network is likely to be cheaper and more efficient in the future (on a per tx basis) if/when BTC hits even Paypal level volumes much less VISA.  Also the "math" fails to account this is just an article on VISA newest datacenter.  They have lots of datacenters all over the world increasing their infrastructure cost by a magnitude.

TL/DR version:
If BTC cost is 1000x higher than VISA cost then BTC is dead now, so uninstall the client.  VISA gross profit margin is 28%.  Thus the price to users is ~4x their cost.  If BTC cost is 1000x higher then BTC ultimate price to users would be 250x what VISA price is.  Of course I don't think BTC will ever cost more than a tiny fraction of VISA but it shows how silly the 1000x number is.
hero member
Activity: 780
Merit: 510
Bitcoin - helping to end bankster enslavement.
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Bitcoin is so much cooler & cheaper Smiley

Are you sure about that ? In order for Bitcoin to scale to Visa volumes (5 trillion $/year), and assuming the average bitcoin is spent once per month (for M1 US dollars this period is about 45 days), the total capitalization of Bitcoin should rise to 400 bln dollars, or an exchange rate of about 40.000 $/BTC.

This sharp price rise would enable about 75 billion dollars of mining fees for the remainder of 2012, and 50 billion dollars mining fees in 2013 and onwards, after the block reward drops to 25BTC/block. That's almost 300 bln $ in mining fees for the next 5 years. No less than about 200 bln$ if we account for the expansion of BTC monetary base, and keep the payment volume constant. On a competitive mining market, the bulk of this 200 bln dollars would go towards mining rigs and electricity, while the remainder will represent mining profits.

Visa's data center, impressive as it may seem, is still 1000x cheaper than the corresponding Bitcoin infrastructure.

Your math MAY be a bit off in many of your statements, first $40.00/btc would have a value of 400 million not billion then you statement that data center is 1000x cheaper than bitcoin infrastructure is also may not be accurate.  Currently there is 11.37 Terahashs, each gig hash represents $1500 in equipment investment on average, thus 11,370 x 1500 = $17,055,000 even if we doubled it that would just be the cost of the empty building not mentioning the all the taxes kick backs, environmentalist bullshit, delays, and paper work.

Just my 2 bit cents.
donator
Activity: 1736
Merit: 1014
Let's talk governance, lipstick, and pigs.
Forget VISA. I expect Bitcoin to take on the $900 Trillion derivatives market and blow it up a few orders of magnitude.
hero member
Activity: 532
Merit: 500
Quote
Bitcoin is so much cooler & cheaper Smiley

Are you sure about that ? In order for Bitcoin to scale to Visa volumes (5 trillion $/year), and assuming the average bitcoin is spent once per month (for M1 US dollars this period is about 45 days), the total capitalization of Bitcoin should rise to 400 bln dollars, or an exchange rate of about 40.000 $/BTC.

This sharp price rise would enable about 75 billion dollars of mining fees for the remainder of 2012, and 50 billion dollars mining fees in 2013 and onwards, after the block reward drops to 25BTC/block. That's almost 300 bln $ in mining fees for the next 5 years. No less than about 200 bln$ if we account for the expansion of BTC monetary base, and keep the payment volume constant. On a competitive mining market, the bulk of this 200 bln dollars would go towards mining rigs and electricity, while the remainder will represent mining profits.

Visa's data center, impressive as it may seem, is still 1000x cheaper than the corresponding Bitcoin infrastructure.

8M BTC * USD$40 < $USD400Billion.

to reach that level 1BTC would be $48,780.49 around now, or $19,047.62 once all BTC are made

At that level, security at the mine will be intense.
sr. member
Activity: 504
Merit: 250
Quote
My main problem with this datacenter is the centralisation..

Sure, the infrastructure will be decentralized, maybe in 1000 "small" data centers, each the size of Visa's Smiley
As for ASICS, you can bet they will be the only form of mining, however that does not change the amount of resources Bitcoin farming will command since they will be available to all players and the difficulty will rise dramatically to compensate.

We could assume some minority players will have top technology with say 2x performance per watt most miners have, thus they will be able to pocket higher profits that could go for charity or for building nice mansions for their rich financiers. Still, the bulk of those 200bln$ worth of resources will be destroyed in the mad game of "proof of work".
donator
Activity: 1736
Merit: 1014
Let's talk governance, lipstick, and pigs.
VISA is fine for what it is now. The Bitcoin network isn't finished yet. It will scale way beyond anything VISA can dream of and will force VISA to adapt Bitcoin to stay in business.

and if btc ever gets this market share there will be mini asics everywhere ...
This is one step.
hero member
Activity: 484
Merit: 500
Ur right probably..

what title do u sugest?

My main problem with this datacenter is the centralisation..

and if btc ever gets this market share there will be mini asics everywhere ...
sr. member
Activity: 504
Merit: 250
Quote
Bitcoin is so much cooler & cheaper Smiley

Are you sure about that ? In order for Bitcoin to scale to Visa volumes (5 trillion $/year), and assuming the average bitcoin is spent once per month (for M1 US dollars this period is about 45 days), the total capitalization of Bitcoin should rise to 400 bln dollars, or an exchange rate of about 40000 $/BTC.

This sharp price rise would enable about 75 billion dollars of mining fees for the remainder of 2012, and 50 billion dollars mining fees in 2013 and onwards, after the block reward drops to 25BTC/block. That's almost 300 bln $ in mining fees for the next 5 years. No less than about 200 bln$ if we account for the expansion of BTC monetary base, and keep the payment volume constant. On a competitive mining market, the bulk of this 200 bln dollars would go towards mining rigs and electricity, while the remainder will represent mining profits.

Visa's data center, impressive as it may seem, is still 1000x cheaper than the corresponding Bitcoin infrastructure.
hero member
Activity: 484
Merit: 500
http://www.usatoday.com/tech/news/story/2012-03-25/visa-data-center/53774904/1

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SOMEWHERE ON THE EASTERN SEABOARD – Prisons are easier to enter than Visa's top-secret Operations Center East, its biggest, newest and most advanced U.S. data center.

The 8-acre facility looks like any other industrial park in a sleepy suburb. But the serene setting masks hundreds of cameras and a crack team of former military personnel. Hydraulic bollards beneath the road leading to the OCE can be quickly raised to stop an intruding car going 50 mph. Any speed faster, and the car can't navigate a hairpin turn, sending it into a drainage pond that functions as a modern-day moat.

The data center resembles a fortress, with dogged attention to detail. It can withstand earthquakes and hurricane-force winds of up to 170 mph. A 1.5-million-gallon storage tank cools the system. Diesel generators onsite have enough power, in the event of an outage, to keep the center running for nine days. They generate enough electricity for 25,000 households.

Once you get clearance from a guard station, get an OK from a roving security guy in a golf cart, and surrender a photo and fingerprint inside, the adventure begins.

There are plenty of reasons for the airtight security. Billions, in fact.

In an era when mobile purchases on smartphones and tablets are expected to grow 73% to $11.6 billion in the U.S. this year, security is a necessary obsession at OCE — and an acknowledgment of the perils posed by profit-minded hackers.

Mobile payments are just a trickle of the more than 200 million daily transactions processed here and at one other Visa data center in North America.

"We're at the forefront of data centers," says Rick Knight, head of global systems operations and engineering. "Now everyone has to do it."

The fortress is home to the facility's 130 workers, who are entrusted with the arduous task of keeping hackers out and the network up.

OCE is a "Tier 4" center, a certification from data center research organization Uptime Institute that requires that every mainframe, air conditioner and battery have a backup.

To meet such lofty standards, Visa has poured hundreds of millions of dollars annually into developing state-of-the-art risk-management technology. VisaNet's services include transaction risk scoring, data encryption and transaction alerts. It all adds up to highly accurate models to identify and address potential fraudulent deals before they're concluded. That has contributed in great part to global fraud rates of just 6 cents per $100 spent, according to Visa.

Visa's core-transaction network is private, immune — the company says — from Internet dangers such as denial-of-service attacks by the likes of Anonymous. When hackers took down Visa's corporate website in 2010, for example, it had no impact on the core network.

Data about data centers

More than half of the world's 13,000 large data centers are in the U.S., according to market researcher Gartner. It estimates $22 billion will be spent on new centers worldwide this year, after growth sputtered during the recession.

Data centers are increasingly in vogue as demand for digital data explodes with the popularity of cloud computing, tablets and smartphones. Google, Facebook and Apple are among the large tech companies that built their data centers in rural areas to save on land and power.

"Physical security is the foundation where you start," says John Thielens, chief security officer of Axway, a business-software vendor. "If you can afford it, build a data center. The big guys build their own."

At the same time, Hewlett-Packard, IBM and others have plunged into the business of managing data centers for corporate clients, says Philip Russom, a research director for The Data Warehousing Institute. Amazon.com says it offers cloud-based "data centers for rent."

"The growth in data center construction is very much tied to the growth in the amount of data which needs to be stored and delivered to businesses and consumers," says Rakesh Shah, director of product marketing and strategy at data-security firm Arbor Networks.

Visa is loath to say how much it spent to build its data center, but a conservative estimate is probably hundreds of millions of dollars, based on construction costs and equipment housed at the facility.

Once inside, visitors encounter a "mantrap" portal, which requires a badge and biometric image of the right index finger to gain access to the data center. The digital image is necessary to pass through a phalanx of shatter-resistant glass doors.

A NASA-like command center, with a 40x20-foot wall of screens and 42 firewalls, monitors the company's worldwide network, which Visa says processes 2,500 transactions per second.

Inside the fortress

The data center's main corridor is about three football fields long, connecting seven 20,000-square-foot rooms called pods.

Two pods contain Visa's core network, a third its corporate networks, and the fourth, development work. A fifth pod handles Visa's new mobile platforms, such as the recently acquired Fundamo, a mobile financial services platform. Two dormant pods await expansion.

Pods 4 and 5 are the brains of the network, a blur of hard drives spinning and fans whirring amid rows of IBM mainframes, Cisco Systems switches and EMC and Hitachi storage arrays. They're all connected by 3,000 miles of cable — enough to traverse the country.

"Yeah, this place is pretty impressive, but there's a lot at stake (in terms of security)," Knight says. "We need to keep things safe."
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