Just when we thought we had enough of energy consumption in the world, a publicly traded bitcoin miner Jackpot Digital (JPOTF:OTC, JP:TSX), in conjunction with Electrium Mining based out of Hungary (being acquired), is knocking on the doors of Quebec’s province – to mine bitcoin. Sources tell us that Jackpot Digital and Electrium have production capabilities that are progressively set to increase to as much as 50,000 rigs or beyond by 2020. It seems that the blockchain revolution has reached Quebec.
In fact Jackpot Digital isn’t the only company knocking. According to coin desk, Quebec is luring cryptocurrency miners as China moves to ban miners from their turf. But what happens when this significant amount of miners move into the region? There are over 30 miners as reported recently.
Of course, if you own bitcoin, which has leapt in value from $1,000 earlier this year to above $15,000, even a fraction of a bitcoin is no longer a trivial amount of money. No matter how lucrative, is a currency experiment worth churning through oodles of energy for?
It also seems that companies like Jackpot Digital / Electrium Mining are going to expand their operations such as banking operations includingATMs and mortgage lending, investment banking, and expand into other blockchain technologies – as can be seen from this chart taken from Electrium website. This bodes well for the entire province of Quebec and Canada’s economy, so perhaps the energy consumption could be justified:
What are the estimates?
It’s almost impossible to calculate exactly how much energy is being used, but cryptocurrency tracking site Digiconomist is the source of one oft-cited estimate. According to its Bitcoin Energy Consumption Index, the network of computers that verify bitcoin transactions draw 3.4 Gigawatts (GW) — a single watt is a joule per second, and your laptop probably probably uses about 60W. That 3.4GW adds up to 30.1 terrawatt hours (TWh) per year of energy — that doesn’t mean that much energy is used per hour, every hour, but is instead a measurement that equates to the amount of work those 30 terrawatts would do over an hour. In this case, that 30.1TWh is equivalent to the energy used by the entire nation of Morocco annually. Some dispute this figure. Fervently. Oscar Lafarga, co-founder from cryptocurrency consultant and developer SetOcean, reckons the real answer is likely half as much. In Bitcoin Magazine, Marc Bevand suggests it’s likely lower still at between 470MW and 540MW.
It seems like the province is really really eager to host the miners. In fact, David Vincent, business development director at electric utility Hydro Quebec, launched a campaign in 2016 to lure the likes of Facebook, Amazon and Microsoft to build their data centers in the Canadian province – but instead got a call from Jackpot Digital and Electrium Bitcoin miners, amongst many others.
David’s sales pitch was simple: the province offers plentiful, cheap and renewable electricity, along with cold weather and a politically stable environment.
In total, For Hydro Quebec, 30+ cryptocurrency mining organizations are asking the company for information regarding connecting to the power grid there. Those companies now account 70 percent of the total wattage capacity in Hydro Quebec’s development pipeline.
Why Quebec Lures Many Cryptocurrency Miners?
1. Abundant and cheap energy.
The transaction processes require a very energy intensive process and also specialized hardware. The rigs used in mining generate a lot of heat and that’s why mining operators search for environments that are colder. The company is now considered to be among the best hydroelectric power producers globally. They’re able to provide electricity at the required levels and at lower rates.
2. Political Stability
Another reason for the rise of Quebec is political stability. It is worth noting down that most miners are searching for areas that don’t have any political instability so that they can easily conduct their businesses at ease and without any major problems. Most of the interested companies are mainly located in the United States and neighbouring countries. However, there are also various mining organizations that are based in Asia, where the cryptocurrency mining landscape is better and advanced. Mining operators always try to search for a place where there is a stable political environment and very few want to take unnecessary risks in their business by choosing areas that are politically unstable.
3. Ability to solve important problems.
The popularity of Quebec has slowly risen due to the company’s ability to solve a major problem facing most companies. They carry out operations 24/7 and they receive a lot of requests globally. Small commercial clients require approximately 5 megawatts while various data centers require approximately 30 to 50 megawatts of electricity. Out of the five best miners in the world, three are currently working with Quebec to ensure that they easily get approximately two hundred to three hundred megawatts of electricity.
Cryptocurrency is a very volatile industry and nothing is straightforward. But it appears that many companies like Jackpot are entering the space and are moving / expanding to Quebec to stay. Choosing a good location like Quebec always ensures that these companies remain competitive to succeed in your business. They also have to hire enough people who can meet all the demands of their clients. This should bring quite a few jobs in the area. We have reason to believe that Quebec’s Hydro is coming into a true Jackpot!
Main E-energy Editor