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In Canada, the provinces are trying to regain control over bitcoin “mining”

An unauthorized bitcoin mine, powered by gas generators, has been dismantled in Alberta, a province in western Canada, and the company responsible has just been convicted by the courts. Renowned for the low prices of its oil and gas, Alberta, like other Canadian provinces, is trying to regulate this energy-intensive Eldorado.

Bitcoin “mining” today requires massive investments in energy (photo illustration). AFP - VALERIA MONGELLI

By: Léopold Picot Follow

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They were simple containers, positioned alongside an old abandoned gas well in Sturgeon County, in the north of the Canadian province of Alberta. Belonging to a Vancouver company specializing in cryptocurrencies, Green Block Mining, these containers were connected to gas generators, which drew their power directly from the well with the agreement of the owning company.

In 2021, Alberta authorities were alerted by neighbors, located more than 700 meters from the installation. “

There was this strange, incessant metallic hum

,” local councilor Kristin Toms told 

the

St. Albert Gazette

in February 2022. The origin of the noise, compared to Boeing jet engines idling? Computer servers, whose fans ran 24 hours a day, seven days a week, to solve the equations necessary to obtain bitcoin, a cryptocurrency.

Green Block Mining had not warned the residents, nor the municipality, nor even the provincial public services commission, which only authorizes the exploitation of these gas wells if the company officially uses it for its activity and without cause inconvenience to residents and the environment.

If the company's management acknowledged its responsibility and regrets not having warned the residents, it assures that it was "

ignorant of the statutory and regulatory requirements

" of the province. The Alberta Public Utilities Commission asked him for 7 million Canadian dollars, but given the company's financial difficulties, the sentence was reduced to 400,000 Canadian dollars in fines and reimbursement of legal costs. Green Block Mining is now prohibited from developing its activities in Alberta.

A costly energy resource 

There are many cryptocurrencies, but the best known and most lucrative is obviously bitcoin, created in 2009 and whose price took off after the subprime crisis. The problem is that “making” this cryptocurrency, unlike others, consumes a lot of energy. “

The equations to solve to seal a bitcoin block are very complex, very powerful servers are required. The first person to do so wins the corresponding portion of bitcoin. It is based on a race for power

,” explains Annie Lecompte.

This race for power is mainly due to the scarcity of bitcoin. Since its inception, the system has planned to create a maximum of 21 million bitcoins. Today, more than 19 million have already been “mined”. However, with its popularity and this system of competition, the power to solve the equation is exponential, so much so that the last bitcoin should be put into circulation in… 2141, despite the little that remains to be manufactured! “

It wasn't that long ago that people were mining bitcoin with Xbox consoles. From now on, it is companies, or rare groups of individuals who join forces to bring together the computing power and the necessary energy

,” continues Annie Lecompte.

Hence the cumulative consumption of five megawatts of the four gas generators installed in Sturgeon County, which represents the equivalent of the consumption of a TGV launched at full speed. The low cost of gas and the cold specific to Canadian winters must have attracted the company specializing in mining, which could thus cool and power its servers at a lower price.

Varying legislation

Alberta is also partly banking on cryptocurrencies to revalue its abandoned gas wells. With the energy transition beginning, provinces focused on fossil fuels, such as Alberta, are promoting abandoned deposits by offering companies to use the gas to power the servers necessary for mining directly on site. For example, the container system, Green Block Mining, allows you to move from one well to another quickly.

Texas, an American state which feels the page on fossil fuels is turning, is doing the same and encouraging cryptocurrency mining thanks to the competitive price of its energy. Other Canadian provinces, such as British Columbia, have on the contrary imposed a moratorium on this practice which is too costly in energy.

After this experience, in Sturgeon County, the municipality accepted this type of activity, as long as they remain more than 1,500 meters from homes, without having granted a new permit for the time being. For Annie Lecompte, “

the social benefits are still very weak: it creates very few jobs, because the vast majority of the process is automated

”. Some companies say that a mining site creates four jobs in the municipality where it is installed: experts say one, or two jobs at most.

Indeed, bitcoin is mainly speculative, and is rarely used in the real economy. For the moment, it serves above all to enrich the privileged few still capable of supporting the race for power. Every year around the world, bitcoin mining releases as much carbon as the Sultanate of Oman, produces as much electronic waste as the Netherlands, consumes as much electricity as Ukraine and as much water as Switzerland, according to

the specialist site Digiconomist

. 

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