Quebec Temporarily Ceases Cryptocurrency Mining OperationsMarch 30, 2018
Quebec has temporarily ceased cryptocurrency mining operations in the region. According to Hydro-Quebec, a provincially owned utility that deals with the production, distribution and transmission of electricity in Quebec, it won’t be able to accept all mining applicants even though it has a large amount of electricity to meet the needs of customers in the region.
The demand of cryptocurrency entrepreneurs for electricity totaled 10,000 megawatts. This amount is actually one quarter of the utility’s total capacity, which is 40,000 megawatts. Hydro-Quebec said that it won’t be able to meet the demands presented to it. The utility’s officials are now developing guidelines to determine which projects in the blockchain industry can be accepted and what conditions and tariffs apply to this sector. Hydro-Quebec will start considering applications again once the guidelines are complete.
Crypto mining projects demand a lot of energy, but only create a few jobs when compared to other industries. Cryptocurrency is not mined in the traditional sense of the word. Bitcoins are mined by using cryptography. Mining involves solving complex mathematical calculations and using immense computing power to solve the puzzle. The miner who solves the puzzle gets a reward as well. Software protocol, computing power and effort play a role in mining bitcoins. The difficulty level goes up or down in a proportional manner depending on one’s computational power. As the number of miners increase, the amount of profits received by the participants decrease.
Those who are looking for alternatives to Bitcoin can turn to other cryptocurrencies such as Peercoin, Dogecoin and Namecoin. These cryptocurrencies are called Altcoins and have a large fan following that wishes to mine it. Special mining software can be used to mine Altcoins. Compared to bitcoins, Altcoins are simpler, more affordable and easier to mine. However, transforming them into large amounts of money is a little difficult. Cryptocurrencies have indeed become popular and many people want to take advantage of the benefits that it offers.
Quebec’s reason for temporarily ceasing cryptocurrency mining operations in the region is to ensure that all Quebecois will have a sufficient supply of energy during winter. Hydro-Quebec won’t have to say that they can’t provide energy because they are in the middle of mining cryptocurrencies. Brome-Missisquoi, a local county municipality in Quebec’s Monteregie region has already implemented a 3-month ban that forbids the formation and development of data mining centers in the area. It was approved by Brome-Missisquoi MRC Council mayors.
During the 3-month period, the council will consider implementing a rule to better create construction permits for these kinds of businesses in the area. The possibility of the moratorium being extended is quite high. This will allow the council to consult specialists on how to enact the issue.
Robert Desmarais, MRC’s director general, said that the mining centers occupy large areas but create few jobs, cause noise pollution and have a high electricity demand as it takes very strong fans to get rid of the heat that’s generated by the computers in the warehouse. According to him, the council doesn’t see any positive economic, environmental or social benefits from this kind of business at the moment.