Proof-of-Burn: Bitcoin Mining Company in Thailand Destroyed by Fire

[Update: A source has come forward to reaffirm that the original article from CoinDesk was innacurate. The fire actually occurred on October 14, 2014 as reported by the local media outlet, Tairath. ]

Cowboyminers, a Bitcoin mining company located in Thailand, has been completely destroyed by fire.

The five megawatt facility was located in Bangkok and had more than 2,000 active miners at the time of the fire. Cowboyminers was a mining co-op which relied primarily on Spondoolies-Tech and Innosilicon hardware. According to local authorities there were two security guards on duty at the time of the blaze and foul play has not yet been ruled out. The company had been formed by European expatriates living in Thailand. The group maintained a low profile despite their extensive operation.

A local media outlet, Tairath, released the news after the Bitcoin community realized that there had been a problem because of a reported a drop in the hash rate. The media reported that the fire, which was sparked on Wednesday night, raged for more than 30 minutes and damage was reported to be extensive.

According to Guy Corem, CEO at Innosilicon, the company was using about 1,000 Dragons, about 100 Spondoolies-Tech miners with a scattering of other manufactures products. Corem also added that the equipment had functioned well for more than two months and that the companies’ technical data indicated that they had been properly cooled. He also added that he had gotten a good impression of Cowboyminers when he had visited the company this last summer, stating:

“I want to add that they’re legit customers who paid for the equipment with BTC. I know some of the people involved other businesses. All kosher.”

The cost of the damage has been estimated to be about US$2 million in Spondoolies-Tech alone. Corem said that his company would be assisting Cowboyminers in salvaging at least some of the hardware. Correctly estimating the damage would be difficult however, as it was purchased with Bitcoin.

The manufacturer has stated that the equipment was cooled properly but also that it had not been inspected after installation. Although the local media reported that there was some speculation it was a simple short circuit.

Authorities nevertheless have not ruled out arson and at least one person working for the company alluded that it could have been caused deliberately:

“There was absolutely no failure anywhere, no wiring failure. It wasn’t damaged, it was fine. The only cables you see are the power cables of the miners themselves … The electrical system were working, there was no short and there is no short even now.”

The Thai media reported that the above source wished to remain anonymous and that that the equipment had continued to operate even as the flames ran through the building, which indicates that there could be something salvageable.

The source was apparently an operator who was in the building at the time of the fire and said that it could have spread so rapidly due to an adhesive that was used to hold acoustical foam in place. There were three buildings involved in the fire and all three were completely engulfed, after which two of them completely collapsed.

Representatives of Cowboyminers said that the company had zero insurance but that profits from the business should be enough to refinance operations.

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