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Fire at Grand Forks server warehouse could have an expensive price tag

Fire consumes a warehouse Tuesday evening on the north side of Grand Forks. The building was declared a total loss. Photo courtesy of Emily Lorenz

GRAND FORKS — Investigators continue to search for answers after massive fire destroyed a Grand Forks warehouse said to contain a large number of servers Tuesday night, April 16.

The warehouse is owned by California-based 3G Venture, a company that in the past has acquired buildings to hold large numbers of computers to generate cryptocurrency like Bitcoin.

The company opened its Grand Forks operation last summer near the North Dakota Mill and Elevator, around the same time it invested $13 million in a former Intel facility in Colorado Springs, cryptocurrency news website Coindoo reported in June 2018.

The company would not comment on the fire Wednesday, but confirmed the warehouse held a server farm.

Vast amounts of computing power are needed to "mine" cryptocurrency, virtual money generated by processing algorithms, and companies like 3G Venture often use server farms similar to the one destroyed Tuesday to do just that.

It's still unknown what caused the fire, and investigators weren't able to enter the site until it cooled down Wednesday morning.

The blaze was so large and hot Grand Forks fire crews could not enter the building to fight the fire and were forced to take a defensive position until it started to die down.

Grand Forks Fire Battalion Chief Bruce Weymier said because the roof and walls are caving, the building is a total loss. Possibly the only thing saved from the fire is any cryptocurrency the server farm may have generated, as it's stored virtually.

No estimate has yet been made, but the building and equipment stored inside could have been worth millions.

"The value just depends on what kind of system you were using and what kind of software they were on," said Broc Wurzbacher, owner of Raptor PCS, a Grand Forks computer repair shop.

For a large mining operation, the cost of equipment adds up quickly.

"You need hundreds of thousands of computers, a big warehouse like they had, certain software to mine (and) a deal where you can deposit it," Wurzbacher said, estimating each individual server unit cost at least a few hundred dollars.

If the warehouse contained the minimum number of servers to make the operation profitable, damages could have been in the hundreds of thousands at the minimum.

And that price tag doesn't count the actual cost of the building and lost time, either.

"They run on time, so they have to rebuild it, they have to find a whole new spot. My guess is they're going to have find a whole new warehouse, basically rebuild the equipment, get . . . all new computers, and that's going to cost them pretty deep again," Wurzbacher said.

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