Gold Rush 2.0: Quebec cannot meet Demand from Interested Bitcoin Miners
Canada’s Quebec province is increasingly becoming a premium destination for cryptocurrency miners from across the world, especially Chinese miners who are anticipating a severe clampdown or even outright ban by their government. The region’s low energy prices and political stability are two of the underlying reasons why it is such a hot-favorite among miners.
However, in a new turn of events, it looks like Quebec’s public utility is currently having a bit too much on their plate due to soaring demands. This is evident from a recent decision by Hydro Quebec to review its commercial strategy after being bombarded with new requests to provide electricity to up and coming crypto mining farms in the region.
A spokesperson representing the company last week said that Hydro Quebec does not have the resources to meet all the anticipated demand in the long run.
A shortage like this was inevitable given that crypto mining is extremely energy intensive. It involves finding solutions to complex mathematical puzzles in order to validate transactions in the cryptocurrency. The transactions are then recorded using a digital ledger dubbed the blockchain. The first miner who cracks the problem is rewarded in the crypto coin they were mining and the whole transaction is registered in the blockchain.
While blockchains do not necessarily need miners, there is no dearth of individuals and businesses with powerful computers that ferociously crunch numbers with the hope of being rewarded in the crypto coin they are mining. Eventually, this became the most trusted and popular way of safeguarding the digital ledger from being tampered or manipulated.
Hydro Quebec, Canada’s largest utility company, estimates that the province can expect an energy surplus of 100 terawatt-hours over the next ten years. To put things into perspective, one terawatt-hour of power is enough to power as many as 60,000 average households in Quebec for a whole year.
Due to a shortage of electricity, many entrepreneurs have been left with no choice but to break down their projects into various smaller investments, says Feral-Pierssens, executive director, emerging technologies at KPMG Canada, Reuters reports.
Feral-Pierssens has firsthand knowledge of the anticipated energy shortage for further mining operations as he also coordinates and collaborates with virtual currency miners who wish to launch new facilities in Quebec. He stretched the impact of the sheer high volume of energy demand from mining companies by saying, “This is the tip of the iceberg, as only a fraction of the initiatives have reached out to Hydro Quebec yet.”
Larger companies, which reportedly include Bitmain and GMO Internet Inc., are expected to begin operations in Quebec in 2018 and early 2019, according to David Vincent, director of business development at Hydro Quebec distribution.