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Utopia Talk / Politics / Bitcoin mining in Canada
Sun Sep 30 05:28:15

Bitcoin mining uses so much electricity that 1 city could curtail facility's power during heat waves

Large power bill a financial boost for Medicine Hat, Alta., but critics concerned about project's emissions

Kyle Bakx · CBC News · Posted: Sep 24, 2018

On the day of the grand opening of the largest bitcoin mining project in the country, the weather was partly cloudy and 15 C. On a Friday afternoon like this one, the new facility uses as much electricity as all of Medicine Hat, Alta., a city of more than 60,000 people and home to several large industrial plants.

The vast amount of electricity needed for bitcoin mining is why the city of Medicine Hat has championed the economic benefits of the project, while environmentalists say they are wary of the significant energy use.

Toronto-based Hut 8 has spent more than $100 million to develop the 4½-hectare site on the northern edge of the city. It has 56 shipping containers, each filled with 180 computer servers that digitally mine for bitcoin around the clock.

The company said it has already mined more than 3,300 bitcoins in Alberta, including at its much smaller site in Drumheller. On average, the Medicine Hat facility mines about 20 bitcoins per day. The value of bitcoin can fluctuate daily, but has sold recently for around $9,000.

The bitcoin mining facility is located right beside the city of Medicine Hat's new natural gas-fired power plant and four wind turbines are a short distance away. The bitcoin plant can consume more than 60 megawatts of power, more than 10 times more electricity used by any other facility in the city, according to the mayor.

That's why, in the event of a summer heat wave, the city has provisions in place to pull the plug on the electricity it provides to Hut 8, so there won't be any blackouts for residents, according to the mayor.

Still, some say the bitcoin mining industry wastes far too much energy.

"It's a huge magnitude when you talk about the carbon emissions," said Saeed Kaddoura, an analyst with the Pembina Institute, an environmental think-tank. "Moving forward, there needs to be some consideration on what the environmental impact of this is."

Medicine Hat owns its own natural gas and electricity generation and distribution businesses. The city leases the land to Hut 8 and the facility employs 40 full-time workers. Add up the economic benefits and the city of Medicine Hat will receive a significant financial boost from the new project, says Ted Clugston, the city's mayor.

Financial details of the city's deal with Hut 8 are not disclosed.

For more than a century, the city has attracted business by offering low-cost energy, and the mayor said this project is no different.

"They could have gone anywhere in the world and they chose Medicine Hat," said Clugston. "[Hut 8] is not here for renewable energy because it is not reliable. They need gas-fired generation and we have it in spades."

Environmental groups are concerned by the sheer amount of energy consumed by bitcoin mining, especially in places like Medicine Hat where most of the electricity is produced by fossil fuels.

The bitcoin system is designed, so only a limited number of the cryptocurrency can be mined everyday. Over time, as more miners compete for a decreasing number of available bitcoins, facilities will have to use more electricity compared to the amount of the cryptocurrency they collect.

"The way the bitcoin algorithm works is that it's designed to waste as much electricity as possible. And the more popular bitcoin becomes, the more electricity it wastes," said Keith Stewart, a spokesperson for Greenpeace.

Stewart questions whether natural gas should be used to produce a digital product.

"If you live in Alberta, you want to have heat and light, those types of things. I don't think bitcoin is a necessity of life for anyone," he said.

The CEO of Hut 8 completely disagrees, arguing the cryptocurrency is essential.

"Bitcoin was created during the financial crisis. It has really served a purpose in terms of providing the opportunity for people who don't necessarily trust their government or their central banks," said Andrew Kiguel.
Sun Sep 30 05:30:43

Canadian Ghost Town Ocean Falls In British Columbia To Be Revived For Crypto Mining
By Albert Kim -

September 6, 2018

Ocean Fall, British Columbia, is a remote and almost desolated rural town in the Canadian wilderness is looking to get a new lease on life as a crypto mining company begins operations.
About Ocean Falls

Ocean Falls is situated along the remote area of British Columbian coastline. The town is found among steep mountains covered in a pine forest which emerges from wide river channels that empty into the Pacific Ocean.

The Canadian town has practically nothing but a bar and around permanent 50-70 residents. The ‘ghost town’ however has something to its advantage, it is home to a hydroelectricity dam which was once used to power a vast wood mill in Ocean Falls.
Brains behind the Ocean Falls mining

Kevin Day is the entrepreneur behind Ocean Falls Blockchain, a company found in a town which is accessible only by water (boats or seaplanes).

Kevin Day had the idea on how to build a mining operation in the town, however, he lacked the technical knowledge and connection, so in 2015, Kevin Day approached the operations manager of the firm who owns the dam, Brent Case.

Kevin Day and Brent Case spent the next two and a half years transforming a huge room in the old mill into a mining facility.

The pair was also involved in negotiations with the owners of the dam, Boralex, to agree on a rate. The agreed price is unknown but is believed to be less than 4 Canadian cents per kilowatt hour over a five-year period.

After agreeing on this lucrative deal, the mining equipment was brought in, and the mine started working in July of this year.
Why locations like Ocean Falls attract mining firms?

Abandoned towns in rural Canada are continuing to prove an attractive place for firms looking to set up Bitcoin mining operations, and for the right reasons too.

The cold climate and abundant spare energy resources in Ocean Falls make it an ideal location for the power-intensive industry.

The primary power supply for the sawmill in Ocean Falls was from the dam. The dam is still capable of producing roughly 13 megawatts of electricity.

The dam in Ocean Falls is not connected to the grid, so the energy is used to generate power for the relatively tiny community, also leaving more than enough for neighboring towns like Bella Bella and Shearwater.

The total amount of energy consumed by these three communities is less than a third of the total energy produced by the dam annually.

The surplus of energy leaves more than enough surplus power for those companies that have proven exceptionally power hungry, like cryptocurrency mining.

Ocean Falls is located in a very remote area, which means industries looking to tap into their almost free power supply would have to consider extra logistic costs, however, it in no way affects mining operations.

Since there is no physical commodity created and moved out, the rurality of the area doesn’t affect operations all that much. It would instead thrive in the cold region with cheap power supply.

Oceans Falls; a revived ghost town?

Owner Brent Case was very excited by the prospect of breathing new life into the town through mining, however, the price of Bitcoin has dropped considerably from when most of the projections were made (February this year).

Since data centers require minimal upkeep after their initial set up, it is unclear just how the industry will impact the town.

The new mining shop does not need hundreds or thousands of employees in Ocean Falls, this means that the local economy may not witness a whole turnaround.

However, more individuals will be required to move into the town to carry work with the mining firm. The number needed may not be able to kick-start such a forgotten town, but it places the town on the map of crypto operations.
Sun Sep 30 05:34:13

Cryptocurrency Miners Are Building Their Own Electricity Infrastructure

Canadian company DMG Blockchain is expanding its mining operation in British Columbia with its own electrical substation.

Access to cheap electricity can make or break a cryptocurrency mining operation, and firms angling to strike it rich in an industry where delays can and will cost digital money will do just about anything to get it, as soon as they can.

The latest move in the quest for bargain-basement kilowatt hours, as quickly as possible: building out local power grids with bespoke electrical substations.

Canadian company DMG Blockchain is building what it hopes will be a fully-functioning substation near the Southern British Columbia town of Castlegar, which is electrified by hydro power. When I spoke to Steven Eliscu, who leads corporate development for DMG, over the phone, he told me that building the substation costs millions of dollars and required the company to build its own access road to haul equipment to the site. The goal: to plug it into the local grid and have it power DMG’s expanded mining operations by September.


Sun Sep 30 05:35:38

Hydro-Québec allowed to charge cryptocurrency miners increased rates

At 15 cents per kilowatt hour (kWh), the tariffs are double the rate paid by Hydro's residential clients.
Presse Canadienne
Updated: July 16, 2018

Hydro-Québec is allowed to charge cryptocurrency miners and blockchain promoters increased rates until regulations for the industry are introduced, the Régie de l’énergie has decided.

In a 45-page decision released on Friday, the Régie accepted the majority of Hydro’s demands.

At 15 cents per kilowatt hour (kWh), the tariffs are double the rate paid by Hydro’s residential clients. The rate would be applied in the event that a promoter connects to Hydro-Québec’s network while a temporary blockade is in effect on the new technology.

“The Régie considers that the rates and conditions … will ensure the security of electricity supply in the particular context of massive, sudden, unexpected and simultaneous demands for the use of blockchain technology, including mining cryptocurrencies,” the decision says.

Tue Oct 02 09:13:01
The future of bit mining
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