{"id":341,"date":"2018-03-06T20:07:17","date_gmt":"2018-03-07T01:07:17","guid":{"rendered":"https:\/\/timestampmag.com\/?p=341"},"modified":"2018-03-06T20:07:17","modified_gmt":"2018-03-07T01:07:17","slug":"cryptocurrency-mining-boom-in-canada-prompts-hydro-quebec-to-seek-%e2%80%8epower-%e2%80%8erate-hike","status":"publish","type":"post","link":"https:\/\/timestampmag.com\/2018\/03\/06\/cryptocurrency-mining-boom-in-canada-prompts-hydro-quebec-to-seek-%e2%80%8epower-%e2%80%8erate-hike\/","title":{"rendered":"Cryptocurrency Mining Boom in Canada Prompts Hydro-Quebec to Seek \u200ePower \u200eRate Hike"},"content":{"rendered":"

The cryptocurrency mining boom has prompted a backlash in Quebec, \u200ewhere the province\u2019s power agency has proposed a rate hike for high-\u200edensity power operations. Hydro-Quebec wants to raise the rate of energy-hogging bitcoin miners from its current level at around 5 Canadian cents per \u200ekilowatt.\u200e<\/span><\/p>\n

Low electricity rates in Canada have attracted bitcoin miners whose energy-intensive computer \u200enetworks enable transactions in the blockchain\u2019s global electronic ledger. This trend has increased\u200f \u200ffollowing a \u200ecrackdown on the new crypto economy in countries like \u200eChina. But the influx has also caused some controversy as providers are concerned that cryptocurrency miners \u200eeager to set up shop in Quebec are taking too much power\u2014-possibly more \u200ethan they can deliver.\u200e<\/span><\/p>\n

Premier Philippe Couillard said at a <\/span>conference in Montreal<\/span><\/a>: \u200e\u200e\u201cIf you want to come settle here, plug in your servers and do Bitcoin \u200emining, we\u2019re not really interested. There needs to be added value for \u200eour society; just having servers to do transaction mining and acquire \u200enew bitcoins, I don\u2019t see the added value.\u201d\u200e<\/span><\/p>\n

Last year, the interest from the cryptocurrency <\/span>sector went bananas<\/span>. Hydro-Quebec \u200ereceived 100 inquiries, with some proposed projects seeking 100 megawatts of capacity. A \u200espokesperson said Canada\u2019s biggest electric utility is discussing the high consumption \u200eassociated with the industry with Natural Resources Minister Pierre Moreau, but no \u200efinal decision has been made over hiking rates.\u200e<\/span><\/p>\n

While the proposed hikes are unlikely to pose a major challenge, they highlight global concerns over the growing energy consumption of \u200ebitcoin miners.\u200e<\/span><\/p>\n

Cryptocurrency mining consumes large quantities of energy, and electricity \u200eis now the largest variable cost in an operation that uses computers to \u200esolve complex \u200emath puzzles in order to validate transactions.\u200e<\/span><\/p>\n

Chinese miners, who are estimated to operate 75% of the machines \u200eplumbing the \u200eblockchain, dominated the scene thanks to cheap coal-fired \u200epower and a system that \u200eallowed them to skirt taxes and grid fees. However, the miners \u200elost their edge \u200eafter the authorities halted trading of digital coins, banned ICOs \u200eand shut down \u200emining.\u200e<\/span><\/p>\n

Some of the most influential companies went on a hunt in new markets, but \u200ethe \u200echoices are narrowing to Canada and a handful of Nordic countries.\u200e<\/span><\/p>\n

Bitcoin\u2019s Boom Concerns<\/span><\/h2>\n

The explosion of mining requests in Quebec over the last few months was mainly tied to the extreme price jumps since Bitcoin value skyrocketed to nearly $20,000 late in 2017. However, the digital asset class remains a relatively new business with volatile economics.\u200e<\/span><\/p>\n

Specifically, the volatility of cryptocurrencies raises a concern as mining operations \u200emay emerge just as quickly as they disappear. In other words, the utility producers \u200emight have to invest millions in new power stations for such a speculative business only \u200eto have miners close their doors when they can no longer compete with falling \u200eprices.\u200e The price of Bitcoin plunged by more than 50 percent from its record point hit earlier in December.<\/span><\/p>\n

Those concerns proved well-founded a few years ago when the Bitcoin price dropped \u200eto just above $200 in 2015, as the coin\u2019s free fall wiped out many mining operations.\u200e<\/span><\/p>\n

On the other hand, some commentators predict that\u200f \u200fcryptocurrency mining will soon \u200eenjoy the economies of scale and fears of rampant energy usage are therefore highly \u200einflated. Mining centers have already evolved over the last year to meet the need, growing in size and scale as well as energy efficiency. \u200e<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

The cryptocurrency mining boom has prompted a backlash in Quebec, \u200ewhere the province\u2019s power agency has proposed a rate hike for high-\u200edensity power operations. Hydro-Quebec wants to raise the rate of energy-hogging bitcoin miners from its current level at around 5 Canadian cents per \u200ekilowatt.\u200e Low electricity rates in Canada have attracted bitcoin miners whose […]<\/p>\n","protected":false},"author":3,"featured_media":343,"comment_status":"open","ping_status":"open","sticky":false,"template":"single-classic-boxed.php","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[2,3,4,5,7],"_links":{"self":[{"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/posts\/341"}],"collection":[{"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/comments?post=341"}],"version-history":[{"count":0,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/posts\/341\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/media\/343"}],"wp:attachment":[{"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/media?parent=341"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/categories?post=341"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/timestampmag.com\/wp-json\/wp\/v2\/tags?post=341"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}