Sherbrooke mayor welcomes Quebec-owned cryptocurrency miner set to create up to 250 jobs
As Bitfarms expands its operations in Quebec, south of U.S. border, Plattsburgh mayor mulls mining moratorium
Just south of the Quebec border, the mayor of Plattsburgh, N.Y., is calling for an 18-month ban on bitcoin mining, concerned about spiking energy costs, while 200 kilometres away, in Sherbrooke, Que., the new mayor is welcoming a bitcoin mining company to his city with open arms.
The Quebec company, Bitfarms, is investing $250 million to create a bitcoin mining farm in Sherbrooke. It says its investment could lead to the creation of up to 250 local jobs.
Bitfarms already has farms across the Montérégie and the Eastern Townships, in Saint-Hyacinthe, Farnham, Notre-Dame-de-Stanbridge, Cowansville and Magog.
"Electricity is much less expensive here than elsewhere. Of course, that attracts enterprises to us," said Sherbrooke Mayor Steve Lussier.
Computers running 24/7
In this business, access to cheap energy is crucial because the bitcoin mining operations are essentially warehouses full of computers that solve math problems and then are issued a certain amount of the digital currency in exchange.
The more computing power miners throw at the system, the better their chances of being rewarded with bitcoin.
The computers must be plugged in at all times. Keeping them cool uses a lot of electricity.
One study found that bitcoin mining around the world used more power than the entire country of Ireland last year.
Plattsburgh mulls ban
Quebec has among the lowest energy prices in North America, which is why bitcoin miners from as far away as China are eyeing setting up in the province.
Plattsburgh, N.Y., has a sweetheart deal on energy, too, one that dates back to the 1950s.. The city gets a fixed amount of electricity from hydroelectric dams on the St. Lawrence River, allowing the city to sell power to its residents at about a third of the normal rates.
The problem is, once the city goes over their fixed amount, they have to buy it from what's called a "spot market" — and it can be very expensive.
"You're paying 20, 50, 100 times more for the power that we normally wouldn't have to," Mayor Colin Read told host Carol Off on As It Happens Thursday. "That then is shared amongst all the ratepayers, not just the bitcoin miners that have put us over the edge."
Read has proposed a law to put an 18-month moratorium on any new, large-scale bitcoin mining operations, while the city drafts new regulations around zoning and electricity use.
Hydro-Québec considers hiking costs for cryptocurrency miners
Hydro-Québec is also looking at how to grapple with an onslaught of demands from cryptocurrency mining operators looking to set up in the province.
A spokesperson told The Canadian Press last month that more than 100 cryptocurrency companies have expressed interest in coming to Quebec, and the utility may consider raising the rates it charges to such mining operations.
In Sherbrooke, Lussier said that Bitfarms will not get preferential or higher rates, but it will get bulk rates based on its energy consumption.
Bitfarms said it agreed with Hydro-Sherbrooke on the terms of a contract for up to 98 megawatts of energy based on its needs, which Lussier said could add up to about $40 million a year.
Bitfarms president Pierre-Luc Quimper said he's using the current value of the cryptocurrency to invest in computing centres.
But he said, that could change, because cryptocurrencies are highly volatile.
The value of a bitcoin is currently just over $12,500, down from around $20,000 last December.
With files from Claude Rivest-Mazzanna