Quebec, a predominantly French-speaking province in eastern Canada, is home to one of the largest bitcoin farms in North America owned by Bitfarms. The cryptocurrency rush is taking over, but environmentalists are increasingly concerned about the implications of bitcoin mining as the energy consumption skyrockets.
Hydro-Québec Provides Clean Energy for Cryptocurrency Mining
The cryptocurrency boom began in 2009 and slowly spread worldwide, with most of the mining work being located in countries offering cheap electricity and little regulation, such as China, Romania, and Iceland, among others. Much as changed since then. Canada too became an interesting country to set up ‘rigs’. In 2016, Hydro-Québec announced a plan to woo data centers. Cryptocurrency miners submitted proposals in September 2017. The overwhelming demand for energy from bitcoin miners has raised questions about how well Hydro-Québec’s grid can provide for the needs.
Bitfarms, one of North America’s largest cryptocurrency mining operations, has 7,000 mining rigs (soon to become 14,000 by July) in a once-abandoned factory in an industrial park in Saint-Hyacinthe, Quebec. This energy-intensive operation is at the very core of cryptocurrency as decentralized ledger systems rely on “proof of work” for their security. “You’re essentially solving worthless puzzles that we cannot solve mathematically. You can only brute-force your way into it.” says Christian Catalini, associate professor of technological innovation at MIT and founder of the university’s Cryptoeconomics Lab, told Technology Review.
“Basically, you’re placing an economic cost between a user and an attacker. If someone wants to subvert the system by faking a transaction, or revert a legitimate transaction, they would have to expend a tremendously high amount of energy and computation—to the point that no rational economic actor would do that, because the cost of doing an attack would be far greater than the benefit”, Catalini added.
David Malone, a specialist in mathematical modeling of network systems, estimates that bitcoin alone is consuming as much electricity as Ireland. Its current global bitcoin hash rate is of 25 million terahashes a second. Mining companies are now promoting their operations to potential investors as environmentally friendly and moving from coal-based countries such as China to cleaner forms of energy, such as hydropower.
Pierre-Luc Quimper, the founder of Bitfarms, located all five of his mining operations in Quebec in order to fuel his 20,000 computers: “We use a lot of energy. It has to be clean. If we have a footprint on the environment, that’s bad.” Hydro-Québec’s hydroelectric power is the ideal solution: a clean, renewable source of energy that can be supplied in massive quantities.