On August 18, 2008, the domain “bitcoin.org” was registered, and in January of 2009, Satoshi Nakamoto, Bitcoin’s founder, mined the first ever block on the chain, known as the genesis block. Since then, the total market capitalization of cryptocurrencies has grown to over 600 billion USD, with more than 1,300 digital currencies in existence.
But where does a Bitcoin, or any other cryptocurrency, come from?
But first, what is crypto mining?
Whenever there is a transaction of a cryptocoin, it is validated by a blockchain. A blockchain is a continually growing list of records, called blocks, which are linked and secured using cryptography.
The miner uses her computer to process the validation of the transaction by solving an algorithm. For her effort, a successful miner obtains a portion of the cryptocurrency as a reward.
Because of that “reward” for the transaction, mining operations, which are mobile data centers, are cropping up all over the world.
Why Canada is the next big spot for Bitcoin mining and cryptocurrencies.
As the algorithms that miners have to solve get more difficult, the mining operations get more energy intensive, generating more heat, and taking up more physical space. For those reasons and more, Canada is an up-and-coming destination for the world’s prime cryptocurrency operations.
Photo Credit: Bloomberg Technology
“Canada is about to become a central source,” explained Cole Diamond, CEO of Coinsquare, one of Canada’s leading cryptocurrency exchanges. “I think there’s definitely a rush happening now. I think we’re going to have a significant amount of mining in the next few months.”
Canada has lots of open and cheap land.
It’s no secret — Canada is large. It’s the second largest country in the world, with 9,984,670 sq. km. The other four countries in the top five?
- Russia: 17,098,242 sq. km
- Canada: 9,984,670 sq. km
- United States: 9,826,675 sq. km
- China: 9,596,960 sq. km
- Brazil: 8,514,877 sq. km
What are the populations of all five countries?
- China: 1,379,000,000
- United States: 323,100,000
- Brazil: 207,700,000
- Russia: 144,526,636
- Canada: 36,290,000
What do you notice? Canada is a massive country with an extremely low population. In other words, the country is largely composed of free and open space to create the infrastructure for mining cryptocurrencies.
There are rural towns all over Canada with open land, cheap energy, and a thirst for new, money-injecting industries, just waiting for the infrastructure to be built.
Canada is cryptocurrency friendly, while other major countries with available land are not.
In early 2018, Chinese cryptocurrency regulators created new rules, stifling mining operations and forcing some of the largest crypto miners, like BTC.TOP and Bitmain, out of the country.
“There’s an enormous amount of digital currency miners that are moving their operations from China to Canada and they don’t want to move again,” Diamond said. “China seems to be taking a position where they want to ban digital currencies as we currently know them. I don’t think anybody would believe Canada would take an aggressive approach to whether or not mining should be allowed here.”
Russia, on the other hand, is aiming to better regulate cryptocurrencies by the summer of 2018, causing investors and miners to flee the country.
“The Central Bank is against the legalization of this type of digital currency (that can be exchanged), since in this case, citizens can start actively investing in cryptocurrencies, not taking into account possible risks,” said Anatoly Aksakov, Chair of the State Duma Committee for the Financial Market.
On the flipside, Canada has taken significant steps to welcome miners, blockchain technology, and cryptocurrencies. They’ve even adopted a new initiative that will explore how blockchain technology can be used to help make government research grants and funding information more transparent to the outside public.
The Quebec factor — cheap mining energy.
As cryptocurrency mining becomes more common, mining operations must expend more energy to validate each transaction, causing massive spikes in energy-usage.
“What’s happening is, with the increasing profitability more and more people start to mine and and fight over the reward, and that’s when you ramp up mining facilities to make money. And that’s why the facilities grow, and the energy consumption grows,” explained Marco Marcovici, cryptocurrency expert and advisor to the hydro-powered crypto-mining company, HydroMiner.
Harald Vranken, associate professor at Netherlands’ Open University, studied the energy draw of a social bitcoin earlier this year, and put the mining of a single bitcoin in the 100MW to 500MW range, while Digiconomist’s projections are around 3.4GW.
So, where do miners get their cheap energy in Canada? Enter Quebec Hydro, which offers some of the lowest electricity rates in North America. They claim that Quebec produces a surplus of 100 terawatt-hours over 10 years, which is the equivalent surplus energy it would take to power 6,000,000 homes.
And they don’t hide their desire to attract more of the world’s largest players in blockchain:
“Of the world’s top five largest blockchain players, we have at least three or four,” David Vincent, Director of Business Development at Hydro Quebec distribution, said in an interview with Reuters.
Low average temperatures in Canada solve heat issue for cryptocurrency miners.
The amount of heat that is generated from a cryptocurrency mine is incredibly high, meaning places with low mean temperatures are ideal for mining infrastructure.
“Cooling is a big factor, it’s very important that it has the right cooling there or else you have to be able to equip a power plant in order to use the energy. That’s a big investment and you have to do it in the right spot,” said Marcovici.
JV Driver Fabricators — your next supplier of cryptocurrency mining infrastructure: Mobile Data Centers.
JVDF has established itself as a leader in the design, engineering, supply chain, fabrication and deployment of mobile data centers currently used in cryptocurrency mining operations and infrastructure.
Our mobile mining units, which have a full-sized data center, allow for easy access to the network and mining can be readily purchased at Petahash scale with a complete self-contained mining solution, including easy set-up, requiring only a suitable location with an affordable power source and Internet access.
We have played a prominent role in deploying close to 500 Petahash of computing power in 2017 that is actively mining today. In 2018 we expect this to increase to 1,500 Petahash.
With the ability to negotiate wholesale line pricing from utility companies, coupled with JVDF’s expertise, we’re able to deploy very attractive modular units for bitcoin and cryptocurrency miners.
The next Gold Rush — cryptocurrency mining.
Photo Credit: Bloomberg Quint
As a summary, you can see that only three countries on this list have the combined “favourable” conditions for cryptocurrency power usage (Canada, Iceland, and Switzerland), but only one country also has the available land, positive government encouragement, and the JV Driver Fabricators factor: Canada.