Welcome to Season 4, episode 7 of the Green Data Center podcast. If you'd like to hear anything about the data center industry, we're happy to discuss it here on the podcast or we can reply directly to you. The best way to reach out, of course, is to use the website greendatacenterguide.com and there is a contact form you can fill out there. Plus, there are links to courses on udemy.com and if you search for data centers the courses should come right up. But the site greendatacenterguide.com is where you're going to get the best, deepest discount for those courses. Plus, there are links to other data center news outlets and other sources so that you can get up to date on the latest in the data center industry.
Let's go back to California and the data center that Twitter has was knocked offline by extreme heat. Now this comes from Peter Judge DCD, who was described as a whistleblower, and he's a former head of security for Twitter. But he was talking with CNN and the Washington Post about the incident. But what he goes on to state is, it's alarming. And he might be a little bit inflated, but he is correct about that heat wave bringing down their data center and losing the Sacramento Data center region. In other words, they couldn't provide Twitter for Sacramento and whatever outlying areas just because of this data center going down. Now we hear a common refrain here, and this is where, when he was discussing this, there were a lot of things that engineers brought up to say, we can provide certain things that can withstand these heat waves. If only you allow us to go ahead and implement some of these things and instead what he calls out is that instead of prioritizing the engineers needs and the data centers needs they prioritized instead compensation packages. Now what it calls out here as a weakness by the Twitter leadership that they did not listen to the engineers and they instead decided to go ahead and compensate themselves. And it's not about the greed, really. It's probably just that they don't understand data centers and the scope of the potential issue that they were facing. So they don't really see this as a threat. And why bother trying to go ahead and figure out what the issues are or try to shore up for a heat wave that may or may not happen? So they went ahead and decided to distribute the profits that they had gotten instead of this overall operational security.
The data center itself has certain threats. And it's not necessarily just about heat waves. It could be water shortages or other things that might jeopardize the operation of the data center. And writing a report is great, but really, the engineers oftentimes pass that up to, say the CEO or somebody else or maybe it's just a group at a particular site or building. And how does that get passed up and presented? That's probably the biggest thing that a lot of the data center operators need to get used to instead of becoming a whistleblower later. I know that there's a lot of people that don't have that confidence on talking about the data centers and the risk, the potential risk and being able to flag that and being able to say, here's how much of a factor, this really means on the data center operations and the other part to that is understanding a certain operation or what might be in jeopardy. Of the facility itself, or even of the IT equipment, and being able to say this is if we have this, this is the cascading issue that this could cause. And it's not just to say that there's a single point of failure. It's just to say that, look, if we have this and this at the same time, a possible double outage or whatever that is. But if you're normally operating and you recognize that you have an issue with, say, heat or water or fuel to your generators or whatever it might be, it needs to be raised. And that should be raised and escalated whenever possible.
I'm used to the financial institutions; do you think a firm such as Goldman Sachs or another financial group or even like E*TRADE or one of those trading groups that if they lose their data center, they lose their capability of trading? They may as well close their doors. If you think about it, operating that way these data centers and operators need to look at it in the same way. Although these data centers are not officially Tier IV, they're not super redundancy filled data centers. Many are at N + 1 at most. And how does that play into what is affected and what the expectations are for that data center to operate? Now of course you can shift that load that is running amount to another data center and do that successfully so that you have a backup data center, but that all costs money too, and it's not as simple as wishing it to happen. You need to make sure that you plan, of course. And that's not just on the IT side. That's also on the facility side, such as how do we make sure that if we're running at capacity or starting to reach a point where we're starting to get to that point, whether it's too warm or whatever the case. How do we make sure that we can do that and transition safely for all the personnel, the IT, everything. The information isn't lost and nothing goes down. A lot of groups, of course, will just point to the cloud and say, there's our solution and that's how we're going to handle this. That's one effective way to go ahead and shore up any sort of weaknesses that you might have. To look for others to pick that up for you or with you as a team. But you want to point that out early and you don't want this to be a lesson learned. You want this to be a case where you solved an issue before it ever happened, and sometimes that's looking to what others mistakes have occurred.
So for those who've followed up with Twitter and we're probably going to see more in the coming weeks about that outage as well as the other outages that happened in the UK. We're probably going to learn a lot about what the active data centers were doing, what their original plans were, what if they had a heat wave or whatever condition that they ran into. What did they do to mitigate that going forward so all the other data center operators can therefore go through the through such heat waves. And we'll go back to London quickly just to mention that even though a couple data centers there failed, there's a lot of data centers in London and across the UK that did not that did not come down or cause major outages. Of those famous ones that did come down, maybe there's others that had to restrict usage and maybe that's their mitigation plan is to do just that or to offsite it. You don't have your data center come down and therefore you keep yourselves out of the news. You keep yourself operating and therefore you can just turn on and keep going whenever that heat wave ends.
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Let's go into education as 3/4 of the data center operators and owners have programs that are geared towards bringing in young people or new talent into the industry. You might have heard a lot about the Navy nuclear programs that all these Navy nuke guys that come out of the Navy are looking for different programs. And they are almost automatically offered all sorts of data center jobs because they generally understand operational redundancy and what it takes to keep things going in a data center, very much like how submarines are done. And I've heard a lot of analogies with that, so it is one of those places where a lot of those operators start to come from that industry, but there's more and more approaching colleges and universities looking for that young talent to come into the industry as well. But really, what we're looking at is a big wave of new data centers coming online as well as a lot of people retiring. So suddenly we're in that crux of constantly looking for people to hire, and there's a lot of groups that are looking to do that well, how do you entice that talent. How do you manage to get people interested and understand the business of data centers.
In many ways data centers aim to keep themselves out of the news and out of something busy where we're going to attract a lot of attention. And that's been the commonplace theme with data centers, no matter who's owning and operating them. But more and more, we're seeing big names across the big news corporations, and we're seeing a lot of that M&A create large companies that are attracting a lot of attention. And of course, data centers keep growing year by year. Along with the information, the data, the storage, everything that goes along with it, and if you have a data center company that can provide the data centers and the services that can be provided with them, then you've probably got yourself a pretty good company set up to go ahead and be available on whatever stock investments.
Whenever you can provide solid jobs and a large company can do that and even the small companies in the data center space can do that and do that very well and very nimbly. So, if you are looking for that talent, what are the things that you can do? One of those is to host a tour and that can be in person or virtual. And you can take that virtual tour because a lot of people post COVID here are still very comfortable staying at home and leaning back in their office chair and watching a virtual tour of a data center. But the actual tours are something to coax people to do, because until you see the size of some of these facilities, you might not get it. You might not understand and depicting that on a camera or just with pictures can be hard to do.
So you can show people around and knock on the hardware and knock on the equipment and show people the walls and such, but until you have people standing against it or you can take that in with your own eyes, sometimes it doesn't really click. Then you also need to talk about what people are doing for the data center. What are the given tasks or the things that happen from day-to-day and that could be simple. Hey, we're doing an expansion or we're doing this swap out of a rack or we're doing this upgrade, whatever that is, or if it's just construction of these facilities, all of that.
The other big thing is just to talk about how much growth potential there is here. A lot of people worry about job security, and that's one of the big things here - what are the potentials for job security, but also, what are the advancement potentials? And where can I go from here and just talking about some of those things that you can springboard from a certain opening or position that you might have? A lot of people might be used to hearing about getting your junior's license or you get your journeyman or whatever that is. And it takes 2-3 years before you're able to do that and then a couple more years before you can get your Masters license and such. In the data center industry year by year, you are springing forth because you are looking at a lot of these different things in a lot shorter period of time, and that means the advancements can happen in a shorter period of time as well.
With a tour can look at the different people and what their tasks are through a given day and who you might interact with and see. And usually, whenever you're talking with them and not might not come through. What they're doing through that data center and what it means if they don't do it, if somebody doesn't get to it. And what that can mean for others and how it works together as a major team and everybody being on the same page and that can all start with just how does the Internet work; start from there and look, we are hosting certain services by these Internet companies and go ahead and drop a name or two if you can and just say what you're doing. What you're providing for them, and if you weren't there, what would happen? Maybe there's another data center that could pick up the slack. But there's a reason why they are there is because they need the help of that particular data center, the people involved there, the services that are involved in order to keep things operational and going day-to-day.
Now the other part of this, as you might be talking with people about that data center and what it is about and with a tour you can go out and talk to a classroom of engineers or young people about their options when they're considering what they want to do. In the coming future this can be an excellent opportunity for you to say exactly what happens in the data center and how that helps the Internet stay up and going.
You don't have to be a teacher. Teachers will tell you all the time that it's great to see when eyes widen and things start to click. But oftentimes that's not what happens; they go home, they think about it when they turned on Netflix or whatever, behind the scenes it'll get them thinking about the data center and what they can help in the industry. The idea is you keep yourself available for their outreach. If you did go talk to a classroom or you did host a tour, follow up. Make sure that you're doing that second outreach, because that can be the difference between you getting candidates in the door and waiting for them to introduce themselves.
That can be a disconnect that can be bridged easily if you have a means to connect with them. At the colleges and universities that can simply be done by just having that roster of people, and if they want to submit a resume, if they want to go ahead and reach out to you, but also keep in in touch with those instructors. If you can get in touch with them as well the instructors will have that e-mail list of all their students. It's one thing to send out an e-mail blast - it's another to have the instructors recommend people as well. There might be people that followed up with the instructors or teachers and they can introduce a couple of candidates that have expressed some interest or they had a follow up question or two. That might be worthwhile. It can be gold as far as finding extra talent that you can see if they're really interested and follow up with and it will take less time than a lot of other outreach methods.
Now I did skip some steps on how do you get in front of those college, university students or those high school students. Go ahead and reach out to the counselors. They will understand the need for people in the industry, especially if you're able to describe the data center industry and its fast growth over the last decade or so. And they'll start to understand, this is something that's going to be huge and they're looking for talent now and in years to come. And they can go ahead and start to point to people or point people your way in order to make the connections. You can reach out to them to have 15 minutes to show up at this high school? Talk to this group of math students in the early morning or in the late afternoon or whatever that that case might be and talk to them about the opportunities that are out there for them. Therefore if you can get in front of them and talk to a couple great students that might be out there in whatever class that might be, you can show that their career options are wide open.
Colleges and universities will have that same opportunity as well, so you can reach out to some of those professors directly. That's the easiest way, especially if you keep in touch with any of them and they might be able to let you take one of their lecture classes for half the class 20-30 minutes to talk with them about data centers and what it's about. Now that's a lot of young talent, but there's other ways to reach out as well. And that's with networking, especially with understanding where people are looking for a career change or transition and there are local economic development groups with counties or with certain groups or regions and you can plug into them to see.
We are looking for more talent in this particular data center and industry and we know that there's a lot of tangential industries, say HVAC techs and where we could really have a lot of technicians from certain industries that transition over to help out the data centers and it won't take that long on training as a lot of the principles are generally the same or transferable. So they can go ahead and get plugged into the data center industry rather easily.
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Let's talk about a recent switch by Ethereum, the cryptocurrency, from their move to proof-of-stake from the previous proof-of-work system. Now this has been a shift that's been coming and talked about for a while and a lot were saying maybe that's not really going to happen.
What this means on that proof-of-stake system is that instead of needing a lot of these GPUs and farms that consume a lot of calculations which are essentially pointless in order to go ahead and do that proof-of-work and they calculate all the calculations in order to prove that something can be verified much more easily. They are instead reducing that by terawatts of energy per year. If you had a lot of cryptocurrency mining equipment based on Ethereum, it's over. Bitcoin is still going, so perhaps switch if you've got some cryptocurrency mining going on, but it was using about 72 terawatt hours of energy a year and growing. That's according to several economists, and it was estimated that this will bring it down by more than 90 percent, which is a huge, drastic shift as far as the amount of energy to be reduced.
Now what we're talking about for drastic is it's estimated. If you look at the total amount of worldwide electricity demand and use, it's almost at 0.2%. It's not a complete percent, but that does mean that 0.2% of the world's electricity demand is going away. Suddenly that big shift makes things that much better and more efficient overall. Now what we have to realize is all those miners out there are going to instead probably just switch to other mining activities. As good as we want to tout that savings, it's probably going to be them switching over to Bitcoin or Raven coin or Ethereum classic. Yes, there's an Ethereum classic among the many, many others.
Given that there's a lot of cryptocurrency prices that are on that downward trend and there's been some cliff diving drops, but it's been kind of a slow and steady sort of drag down over the long term here over the last year or so. A lot of the other companies are evaluating where they're going in the future and decide to make that change and get out of the cryptocurrency game all together. This hasn't been something new - everybody knew this was coming with Ethereum. The cryptocurrency market was starting to get flooded with all these second hand, third hand GPU's and miners. That's led to a big downturn on the amount of manufacturing of the miners too. The miners being the basic GPUs and such, and now we're starting to see the previous shortages weakening a lot.
With the theory of essentially dropping off as a lot of other cryptocurrencies just aren't as efficient as Ethereum, or you're not getting as much as Ethereum, you're basically not going to be mining those other currencies. You may as well go ahead and sell or switch to one of the others that you're hoping to at least get some payback.
The theorem is a proof-of-stake that was proven before Ethereum switched. The proof-of-stake is not a new concept and is something that they finally switched to as an advantage. It does keep the currency decentralized, and there's a lot of people that are worried about the security of that proof-of-stake, but that concern has already been debunked. With Ethereum sitting at about 200 billion of total worth and maybe climbing, maybe dropping, we'll see, but it's probably not going out anytime soon.
If Ethereum is aiming to take the lead on being one of the more efficient ones, that is the largest so far. They can look to do other improvements that are going to support transactions or making and keeping it decentralized and keeping up security without having all this crypto mining to do, proof-of-work in order to stay stable.
Now, how does Ethereum stack up against a lot of these other coins that are out there on the efficiency side? Looking at some of the others that have been out there for a little bit, there's one called solar coin and it operates strictly this the same way as a regular cryptocurrency, but you are awarded a solar coin, one solar coin for every MW hour produced, so based on that you can go ahead and have solar panels. Whether you're a large company or just a small provider or whatever, you can generate solar coins, and of course those can be traded and such. You need to upload the documentation that shows how much energy you got over what period of time in order to cash in and get that cryptocurrency. There is a manual sort of documentation part. But if you can go ahead and establish that in a month or even a yearly basis you're looking at cashing in on some solar coin which may be used more and more. It can be used like any other cryptocurrency, and you could put it on a cryptocurrency exchange and exchange it that way. Ideally you could cash in a little bit more easily.
Another one that the co-founder of Ethereum has come up with is Cardano, and that's been a proof-of-stake since the beginning. One of the reasons that it was invented is to be faster on the transactions. Now it's proof-of-stake means that it's much more efficient, but it's also got exchanges that can do 1000 transactions per second, while Bitcoin is about 7 transactions a second.
There are those that can also be mined in the cloud, for instance Chia and it's not as well known, but it's one of those that you can go ahead and farm chia efficiently quickly right out of the cloud, so you don't really need to go into the whole crypto mining business in order to start farming this way. What makes this a little bit more interesting is it's called a proof-of-space-time model. What is that? If you read about that like I had to, you're storing a certain amount of data for a specific amount of time based on what you're looking at for generation. And you can go ahead and mine that chia efficiently, quickly that way and you're not draining anything on the environment. You're not having that extra energy consumption, etc. It's probably going to start replacing a lot of those proof-of-work concepts and the more this takes off because its cloud based, it's probably going to grow just based on that alone. So we are looking forward to seeing what Chia can do in the near future as well.
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Now let's pivot a little bit to talk about NFTS. People have been talking about NFTS for artwork, but it's not just used for artwork and digital things, it's used for certificates of ownership of all kinds of all digital ownership. That means music, videos, tokens, items, whatever the collectible thing might be, whether its sports related or game related or anything. NFT's are produced and they're going to be blockchain related. If you're having that as an NFT on a blockchain and it's supported by one network or another. In the case of most NFTS, they're Ethereum based, which means that they're about to get much more efficient, but they still have a number of transactions that can be sapping on the overall energy use across the world.
If you think about how much is being produced everywhere, the NFT's are another growing legion. Aside from cryptocurrency, we are likely to see NFTs take off with blockchain demand and going to be among the pieces and parts of the metaverse as it's coming online and growing. I should say Metaverse is plural because the metaverse from Meta is not the only one that's out there that people are building, but there's other things in blockchain gaming and other things are becoming more and more popular and is ramping up quickly.
We're likely to see a lot of that happening with the NFTs being part of that and requiring a lot more energy in order to support now, because Ethereum is switching, it means that the major platform Ethereum being used for all these NFTs doesn't affect every one of them though. Paying attention to which one is being used by NFTs helps as they were using Ethereum, they were looking at about 48 Kilowatt hours per NFT. That equates to about a day, a day and 1/2 in the US household, or a week or more depending on where you're at in the rest of the world. As far as the amount of energy use, so and that was because it was more of a proof-of-work and if you have that type of consensus algorithm that uses that much energy.
It's not the NFT itself, it's the network that you're using. If we drop that by 99%, suddenly instead of 48 kilowatt hours you're dropping to less than 1% and as stated, we're dropping it by 99%. That's a conservative measure actually for Ethereum, so it's likely to drop more than that and we're probably going to have Ethereum and everything that it supports as networks basically drop the amount of energy that you're they're using. These reports on the NFT generation that explosion that's about to happen and seeing that as a major upset or major worry for the energy use in the world is probably not valid. Ethereum just switching again to that proof-of-stake instead of work is going to be the big reason why that's avoided.
If you're worried about generating another NFT based on the latest crayon drawings that your children might have created or whatever, don't fret. Go ahead and make some NFTs and share them with everyone that you want. It doesn't mean they're going to retain value, but what it does mean is they're not going to really use any energy consumption, by comparison. But overall, you have an NFT now. Congratulations, you're part of that marketplace and you have something that is non fungible. In other words, you cannot mess with it any longer, and it is yours digitally to share with others, and the ownership of that is yours into the future, unless you decide to sell, of course. We'll see a lot more NFTs available on Metaverse and everywhere into the future. Everyone will of course not just share pictures, but anything that they might be able to create. It does protect those that are looking to create something and not have it just automatically go out to the Internet and be stolen, so to speak, and shared by everyone else. Instead, you can go ahead and have that NFT and you can keep that and claim that as your own and not be worried about how much energy it takes to generate it or to trade it.
