Quebec produces about 97% of its energy from hydroelectric projects and produces about 1,245 tonnes of carbon per TWh of electricity, which is between 50 and 240 times less than the industry average in North America. The mining of cryptocurrency is therefore relatively clean and cheap in Quebec, which makes it interesting for both the province and for miners. Cryptocurrencies consume a lot of energy by nature. As decentralized general ledger systems, of which Bitcoin is the most important, most rely for their security on an approach called “proof of work”. Every 10 minutes, Bitcoin publishes a new currency in exchange for solving computer problems that check for a “hang”. transactions. To do this, participants convert the data representing these transactions into a code sequence called “hashing”, trying again and again until they arrive at a code that meets certain criteria. And while this does not require a huge degree of sophistication – insiders liken the process to guessing lottery numbers – it requires an immense amount of wrong guessing. Resource intensity is inherent in a decentralized system such as Bitcoin, as it relies on a basic lack of trust between participants. Without a doubt, electricity is the biggest expense for any mining operation. And so, to be profitable, farms must be able to get cheap electricity. This is one of the main reasons why China has led the mining boom: its electricity tariffs are extremely low. Hydropower plants are becoming increasingly popular in the digital currency mining space as this type of power generation technology is used by miners in various countries. Low-cost electricity in Winnipeg, Quebec, and Canada, in general, is beginning to attract bitcoin miners. Hydro-Québec is a large state-owned company headquartered in Montreal that manages and supplies electricity to Quebec. The company is not doing as well, energy sales are on the brink of choking, reveals the general manager, Eric Martel, and if nothing changes, the Quebecers will face an “explosion” of the tariffs of the electricity. Hydro-Québec must sell its surplus energy and, to that end, will try to make energy-intensive businesses such as giant websites and server companies use Quebec’s resources. Hydro-Québec already supplies 450 MWh to various data centers of servers. Martel is also seeking to attract bitcoin miners to the region, while Hydro-Québec hopes to distribute 6 TWh to those who need an excess supply of cheaper energy. The mining activity of Bitcoin can therefore be polluting, although the impact on the environment is naturally mitigated by the use of renewable energies, such as hydropower. Hydropower can also be relatively cheap, strengthening its economic viability. Hydropower, which uses moving water to run turbines that produce electricity, is undeniably cleaner than coal and other types of electricity generated by fossil fuels.
Unfortunately, with massive programs and unnecessary bureaucracies, the inevitable happened. The Quebec government is blocking all new requests for hydroelectric power from cryptocurrency mining operations, realizing that it has taken on more than it could chew on and that a reconfiguration was needed. . In addition, Hydro-Québec reported in February that it was considering raising rates. For the moment, at the time of writing this article, the utility company Hydro-Québec refuses any new customer. Feeding the Bitcoin blockchain from renewable energies is definitely the way to carry out an efficient and sustainable extraction of Bitcoin. Although this figure is too small to be a major factor on the part of global utilities, it represents a significant growth story for companies investing in wind, water and solar power. In addition, the cold winters of Quebec could give a second use to the Bitcoin mining by-product, heat. Imagining the Bitcoin mining industry as a static business is a big mistake. There will be lots of industries affected by Bitcoin mining, such as agriculture, where we can use the excess heat generated by mining equipment to help grow greenhouse vegetables. We can also think of companies such as Quarnot, which recently launched an elegant space heater for your home, which also contains crypto-currencies. These mining crypto-currencies seek ways to offset rising costs and often decreasing returns. For example, the number of bitcoins miners receive for their efforts is, by definition, halved every four years. Lower encryption values can make high energy bills and other mining overhead costs unsustainable. Income-generating businesses using mining byproducts could be part of the sustainable response. Certainly, if our public energy service did not act quickly, it would have completely missed this huge pool of opportunities for Quebecers.