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B. C. The sympathy recently expressed by Hydro for crypto-valued and power-hungry miners could be a good omen for the province. But wooing this new industry is an art that the utility should start learning if it wants to have any chance of success.
In November, B.C. Hydro has prepared the welcome carpet for cryptocurrant miners, saying that he would try to give them discounts. These discounts will make the province more attractive to miners, B.C. Dina Matterson, head of Hydro's business development, said in a conference on energy. "We need to get involved."
The mental openness of utility towards an emerging industry is commendable. His recognition of business opportunities is noticed.
Mining – the issue of cryptocurrencies like Bitcoin – has emerged as a billion dollar industry in recent years, as the main underlying asset has risen in value from its initial cents to the thousands it is worth now.
Miners use computers to solve mathematical puzzles, helping to facilitate Bitcoin transactions and gain newly generated units in the process. Because of the complexity of the puzzles, the activity uses a lot of energy. A large operation uses megawatts of electricity, which translates easily into thousands of dollars a day.
Miners are ideal customers for utilities. Their computers work 24/7. Unlike most other major consumers, a mining company guarantees continuous and uninterrupted use. They also do not care about the location or availability of the infrastructure. As long as power is cheap, miners will move everywhere and erect their buildings if that becomes necessary.
B. C. It is well located to welcome them. The province is littered with cities in distressed resources, which once housed the wood or pulp mills or mining companies. Those players used a lot of power and when they closed, they left behind substations and transmission lines that were largely unused.
By attracting cryptocurrency miners to B.C., the province's utility obtains a stable buyer for power in places that otherwise would be difficult to sell, and the economies of those small distressed cities have a new life.
It is true that cryptocurrency mines do not create many jobs. The machines work alone and, apart from the setting, the only operation required is daily maintenance. But they still create work.
The Hut 8 Mining Corp. of Toronto, which claims to be the largest of its kind to be listed on the stock exchange, has created 100 temporary construction jobs and 42 full-time jobs in Medicine Hat, Alta. This is easily 142 families – a small city.
But for B.C. to derive such benefits, he needs to know what he is doing. Utilities in general have not had a good track record in dealing with cryptocurrency miners.
He considers the case of Québec, which also prepared the welcome carpet for the miners last year. In the end it was bombarded with questions and the province reacted by tripling the price of electricity for new miners to 15 cents per kilowatt hour.
This is an absurd idea because no one can make money at such a price.
The price of electricity is the dominant variable in determining profitability. It is entirely in black and white, based on mathematics and without nuances.
It is not a question of higher winnings or being more efficient. There is absolutely nothing that a miner can do to make 15 cents work.
The Quebec reaction showed a fundamental lack of understanding of the extraction of cryptocurrencies.
In December, the Ontario regulatory authority sought blockchain and cryptocurrency experts for an advisory committee. This was not related to coinage, but perhaps to B.C. he should consider the same thing if he is serious about bringing miners into the province.
Coal-burning China currently dominates the extraction of cryptocurrencies, but dirty power is increasingly avoided while the world supports the will to fight climate change.
There will be more demand to come from miners for clean power. B. C. it's well positioned to take advantage of it, but it needs to do its homework.
Ethan Lou was one of the first Bitcoin investors and is a senior partner of the cryptocurrency company Ocuis in Calgary.
© Copyright Times Colonist
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