Monday , 19 February 2018

Canada is unable to meet electricity demands of Bitcoin miners

Canada’s largest utility, Hydro Quebec, is reviewing its commercial energy strategy after being inundated with demand from global digital currency miners rushing to the province to benefit from political stability and low energy prices, according to Reuters. Hydro Quebec will not have the long-term capacity to meet all the anticipated demand, a company spokesman said, after the utility’s potential mining projects more than doubled in a week to 70.

Many miners, including giants like China-based Bitmain, have made it clear that they are looking to setup new mining operations overseas in countries with low power costs and surplus of energy. The crack down on cryptocurrency exchanges in China, as well as talks of power regulations applying to miners, has prompted miners to consider new sites to operate from.

Bitmain told Reuters that it has been mining in Canada since 2016, although the location of their Canadian operation was not revealed.

Bitcoin mining consumes large quantities of energy because it uses computers to solve complex math puzzles to validate transactions in the cryptocurrency, which are written to the blockchain, or digital ledger.

The first miner to solve the problem is rewarded in bitcoin and the transaction is added to the blockchain.

Canada’s surplus isn’t enough

Ironically, Hydro Quebec may have to renege on its commercial power strategy – as forecasts show that they would not be able to meet the booming demand of industries looking to take advantage of the energy surplus in the province. The company is reviewing its plans after 70 cryptocurrency mining operators applied to set up shop in the province in the space of the week.

Hydro Quebec claims to have a surplus of 100 terawatt hours over 10 years. As a reference, Digiconomist’s Bitcoin Energy Consumption Index estimates the combination of Bitcoin and Bitcoin Cash’s estimated annual electricity consumption around 31 terawatt-hours.

Not enough power

The utility supplier’s spokesman, Marc-Antoine Pouliot, told Reuters that the sheer number of companies looking to start cryptocurrency mining operations in the province is not sustainable, even with the surplus created by Hydro Quebec.

“We are receiving dozens of demands each day. This context is prompting us to clearly define our strategy. We won’t be able to power all the projects that we’re receiving. This is evolving very rapidly so we have to be prudent.”

The utility has also been actively attracting data centers to the province since 2016, citing the potential for job creation by these centers.

In an earlier interview with Reuters, HQ business development director David Vincent said potential mining operators were looking at sites with energy demands ranging from those of data centers to that of power-hungry as metal smelting plants.

Another stumbling block in the way of cryptocurrency operations being established is the lack of buildings ready for occupation.

A shortage of sites in Quebec with the necessary electric capacity has prompted several entrepreneurs to break down their projects into smaller investments, said Laurent Feral-Pierssens, executive director, emerging technologies at KPMG Canada.

“This is the tip of the iceberg, as only a fraction of the initiatives have reached out to Hydro Quebec yet,” said Feral-Pierssens, who works with digital currency miners that want to open operations in the province.

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