The Great Migration of Bitcoin Miners to Canada
As news spreads about a looming suppression of cryptocurrency mining operations in China, Canada’s largest energy utility, Hydro Quebec, has begun to receive numerous inquiries about new mining operations.
China is currently a world leader in cryptocurrency mining because it offers relatively low energy prices, which Canada does as well. According to numerous media reports, Hydro Quebec welcomes the surge of interest but has been unsure of its ability to supply ample energy for the growing sector. The current number of potential new mining projects is over 100 and dozens of new requests come in weekly.
“Right now, we are analyzing the requests. It’s too soon to confirm anything. It’s important to note that we don’t know if all these projects are serious enough to materialize,” Spokesperson at Hydro-Québec Jonathan Côté told Cryptonews.com. “Since we have available energy, it is an interesting source of growth. One of the challenges is dealing with a large number of requests that we are receiving and to evaluate them,” he added.
The mining of Bitcoin and other cryptocurrencies involves solving complex puzzles using enormous computing power and energy in order to validate transactions and be awarded in a digital currency. According to Hydro Quebec, it has an energy surplus of 100 terawatt hours (TWh) available over the next 10 years (one TWh is equal to 1 million megawatt hours or MWh and can power about 60,000 homes annually).
Bitmain, GMO Internet and BTC.Top are among the major mining farms reportedly eyeing opportunities in Canada. BTC.Top did not respond to our request for comment and Bitmain declined to comment – both of these companies are based in China.
GMO Internet of Japan, which is now developing cloud mining services and a mining chip, said the details of its expanding operations, “such as the exact date of launch, the price, investment opportunities, ICO token sale, specification, [distributor, etc.] are yet to be decided.”
Diversity and Innovation
Pierre-Luc Quimper, the founder of established Canadian mining company Backbone Hosting Solutions, known as Bitfarms, describes Hydro Quebec’s energy pricing as “competitive,” and also points out that Hydro Quebec relies on eco-friendly hydroelectricity to serve the eastern province.
While Quimper recognizes that competition can bring challenges, he told Cryptonews.com his company embraces local growth in the crypto-mining industry, saying, “We believe a diversity of players in that emerging market will bring innovations and will convince decision makers that the blockchain technology is the future.”
Canada’s Bitfarms currently has 87 employees and four mines: Saint-Hyacinthe, Farnham, Notre-Dame-de-Stanbridge and Cowansville. Quimper said it is expanding and has a goal to go from using 27.5 MW (1 million watts) to 187 MW by December 2018. It plans to “hire Quebecers and train them to have new skills: electrician, technician, engineer, developer, [etc.],” Quimper conveyed. He also said the company is carrying our research and development into “innovative ways to use the heat coming out of our miners.” Bitfarms’ revenue in the last six weeks of 2017 was USD 10 million, according to Reuters.
Israel-based Blockchain Mining (BLCM) is scheduled to buy control of Bitfarms in February 2018. BLCM is also planning to list its stock on both Nasdaq and the Toronto Stock Exchange by the summer of 2018.
Like Chinese mining organizations, BLCM is coming to Canada in response to threats of regulatory crackdowns; in early 2018, the Israel Securities Authority proposed rules to ban companies working with cryptocurrencies from the Tel Aviv exchange. In acquiring Bitfarms, BLCM says it will be “creating one of the world’s largest cryptocurrency mining companies by installed power and hash power” and it reportedly plans to open three more facilities this year.
Côté said most new mining facilities in the region will likely be in the urban Montreal, Quebec area. He adds that existing facilities that can accommodate large amounts of power consumption, like old factories, are also of interest. Bitfarms’ Farnham facility is an example – it is located in a former carpet factory. Quimper said this repurposing of abandoned space is an example of how Bitcoin mining can usher in new economic opportunities and added, “There are very strict zoning bylaws so industrial facilities like ours do not negatively impact local communities.”