What Capacitor Faks knows about cryptocurrencies can be neatly written on the back of a postage stamp; blockchains, nodes, mining rigs, forks and even whales are part of a shadowy domain into which we have never ventured.
However, a recent article on the effect of the slump in digital currencies on aluminum capacitor inventories tweaked our interest, and we ventured a few steps into the shadows. What we found was even weirder than we’d imagined.
It seems that the cryptocurrency engine is fueled by an activity called mining; mankind are the miners, and the more they mine, the more they feed the engine, and the more they feed the engine the more chance they have of being rewarded with a newly minted piece of cryptocurrency.
It’s strange but, the further we ventured into this brave new world, the more we were reminded of the scene in the move “The Pirates! Band of Misfits” where the luxuriantly-bearded pirate captain advises that they must avoid that expanse of ocean marked on the map with the warning “Here be monsters!” Charles Darwin standing alongside him dryly remarks that this is merely a ruse of the map makers. We know who was proven correct in the end.
Anyway, mankind toils away at the crytocurrency coal face not with excavators, drag-lines or dynamite but with computing grunt. Capacitor Faks does not pretend to understand what digital mineral is being sought, but it appears to require the churning and burning of algorithms to extract it. This churning and burning requires serious processing power. This processing power was originally available with the humble CPU, but, as the shaft got deeper, more power was needed. Graphic cards were then wheeled up to the mine face, and finally ASICs were invented to delve into the very depths of the beast.
Now it appears that to successfully mine digital currency a worldwide network of miners is needed; some are doing it on an industrial scale (there are reports of a cryptocurrency mine buried deep below the Icelandic permafrost in true 007 fashion)), while others stake their claim as hobbyists.
These hobbyists needed ASICs to even try to compete with the industrial players, and the manufacture of these crypto mining machines (complete with their contingent of aluminum filter capacitors) blossomed into an industry of its own at the heights of the market.
With the current collapse of Bitcoin et al, these ASICs are in less (read rapidly approaching zero) demand and, if anything can be said to be blooming in this field, it is, by all accounts, the market in second-hand mining machines which are being dumped at 5% of the price of new devices.
So there you have it. The rise and fall of a market that most of the world, we hazard a guess, does not understand in the slightest has led to a mountain of Taiwanese capacitors seeking alternative accommodation.
Drivetrains we get. Blockchains no. It’s a strange world. Go figure.