The migration of cryptocurrency miners to hydro-power abundant Quebec has been received cautiously lately, following an initial period over-exuberance on the part of local officials. The future for Quebec’s mining industry has since encountered a number of hurdles, from the province’s ability to supply power during the dry winter season to the often overlooked environmental tolls of producing hydropower.
Hydro-Quebec Considers Suspending Power Provision to Mining Companies During Dry Season
In recent months, the Canadian province of Quebec has sought to attract cryptocurrency miners, offering up cheap and abundant hydropower.
After initially boasting 5000 megawatts of surplus electricity, the province’s state-owned power company, Hydro-Quebec, has since taken a more cautious approach with regards to encouraging the proliferation of Quebec-based mining operations, after reconsidering its ability to satiate demand from both citizens and miners during the dry winter season.
Marc-Antoine Pouliot, a spokesperson for Hydro-Quebec, has described the dry season as the principal barrier to Hydro-Quebec’s capacity to meet the constant energy draw produced by miners, recently proposing that sanctions are placed on mining companies during winter.
“In Quebec, residential customers heat their homes with electricity. [As a] consequence, the demand can be very high when the temperature is below -20°C for a few days. We are now analyzing the effect of the [mining industry] on our winter peak. One of the solutions could be to oblige blockchain companies to suspend the activity during the winter.”
Canadians Concerned About Ecological Toll of Increased Power Consumption
The Massachusetts Institute of Technology (MIT) has published an article claiming that the purportedly modest ecological footprint generated through Quebec’s power production has come under increasing scrutiny. Jeff Wells, a conservation biologist and researcher at Cornell University, has also warned of the potential environmental consequences of increased miner activities, emphasizing the ecological strains incurred through the construction of dams.
Mr. Wells asserts that the damage created by constructing the reservoirs required to hold a ready supply of water is too great to justify any industry. Mr. Wells asserts that said reservoirs are increasingly overtaking existing forests and leading to the large-scale rotting of tree roots, which results in the release of significant quantities of methane. “You’re putting hundreds of thousands and eventually millions of acres under water. You’re putting a greenhouse gas in the atmosphere and stopping the ability of that area to take any more carbon into the system. You’ve lost a whole ecosystem.”
Mr. Pouliot has sought to assure that the company’s ability to meet demand during the peak of winter is the sole hurdle posed by the proliferation of industrial-scale mining operations. The spokesman has dismissed ecological concerns, asserting that full environmental impact assessments are completed before any dams are constructed by the Hydro-Quebec.
Canadian Company Creates Modular Mining Apparatus
Canadian startup company, K.E. Inc., has developed self-contained modular shells designed to accommodate up to 1,200 cryptocurrency miners. The company’s founder, Fooad Nejad, has asserted that a recirculation ventilation system reduces power consumption through eliminating heating and cooling requirements.
The pods resemble shipping containers, however, and can be constructed virtually anywhere without requiring retrofitting and other costs associated with establishing mining operations in old buildings. The pods can also be adapted to channel heat production, with Mr. Nejad predicting that the pods may in future be used to grow warm-weather crops year round.
Despite efforts to reduce the ecological footprint incurred through mining, Christian Catalini, associate professor of technological innovation at MIT and founder of MIT’s Crypto-economics lab, has argued that the energy-intensive nature of cryptocurrency mining is a consequence of the fundamental lack of trust between the participants of a transaction.
“You’re essentially solving worthless puzzles that we cannot solve mathematically. You can only brute-force your way into it, Mr. Catalini said. “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.”
Do you think that the honeymoon period is over between Hydro-Quebec and cryptocurrency miners? Share your thoughts in the comments section below!
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