The Quirk Creek natural gas plant, located southwest of Calgary - Canada, could serve as the new home for 200,000 bitcoin mining machines relocated from China, according to a press release from Black Rock Oil Company.
The Nevada-based company announced in July that it had reached an agreement to operate up to one million bitcoin mining platforms in Alberta, but some experts question whether a bitcoin mining operation of this size will be allowed to continue.
Three natural gas production sites in southern Alberta, Canada, could house "up to a million" bitcoin mining machines relocated from China under a Nevada-based deal proposed by the Black Rock Petroleum Company amid ongoing strikes on Beijing for production and trading of cryptocurrencies.
Bitcoin Mining Process
Bitcoin is a digital currency, the number 1 currency in the market according to CoinMarketCap. This digital currency can be sent between users without the need for a central bank, utilizing blockchain technology to keep the book decentralized in transactions. in my Bitcoin it is necessary to have a computer with high processing capacity, this process of unlocking a new bitcoin to add to the existing supply is called "mining". Given the difficulty of extracting Bitcoin, it is currently no longer possible to do with a home computer. Miners buy machines that are made specifically to mine bitcoin, such as ASICS. Upon finding the matching band, the miner receives a bitcoin reward for each block he mines.
This reward was created with the intent to pay people who lend on computing power to keep the blockchain at work. Thousands of miners compete every day for the reward offered by the blocks. A block of Bitcoin transactions is formed every 10 minutes, so competition resumes in this time period.
Thousands of bitcoin mining computers were shut down from China to Alberta
No deadline for the deal was announced immediately, although the contract term for the use of the natural gas sites is set at 24 months, according to a press release from the Black Rock Petroleum Company.
Earlier this year, Chinese authorities cracked down on bitcoin mines due to apparent environmental concerns and other issues, ordering miners to close.
The Black Rock Petroleum Company press release states some results for the equipment and states: “The initial commitment of the contract is that 200,000 cars are scheduled for placement, in addition to 300,000 cars in the short term and 500,000 in the medium term as soon as capacity is available. the host is ready. "
Up to a million mining machines, or platforms, entering Alberta would represent a significant portion of China's total mining capacity, experts say, with major impacts on the province's energy consumption.
Alex de Vries, a researcher and economist who runs the Digiconomist cryptocurrency analysis site, said the move to Alberta would represent a billion-dollar investment using fossil fuels as an energy source.
"In China, they used hydropower for at least part of the year and for the rest of the year they will use Chinese coal," he said of the energy source that powers the computers used. in the mining process.
"But if they come to Alberta and start working on natural gas all year round, it is not improving the situation for this grid, which is already responsible for more CO2 emissions than we save with all electric vehicles around the world. . Combined. "
1/3 of global mining capacity
It is difficult to determine definitively how many computers make up the global bitcoin mining network; Alex de Vries estimates the number is around three million.
In other words, the number of supposed machines destined for Alberta could represent about a third of global mining capacity.
While he is skeptical of the "astronomical" numbers proposed in Alberta, Brandon Arvanaghi, a US-based bitcoin mining engineer not affiliated with the Alberta project, said the full impact of the China strike has not yet been understood. completely.
"Basically, every North American miner has started to improve every aspect of their mining operation. They raised more money, gained more energy, got more land and are ready to expand," Arvanaghi said.
Bitcoin processors can connect to the power grid or directly to a power generator, such as a natural gas plant, to power your computer network.
As bitcoin miners tend to be drawn to cheaper sources of electricity, Arvanaghi said there are benefits for natural gas producers as well. Some bitcoin mining companies use explosive gas from oil drilling, preventing it from igniting.
Environmental Impact Concerns
Even if Black Rock Petroleum’s proposal does not match its profits, the act of pairing natural gas and bitcoin mining is not a new phenomenon.
Saeed Kaddoura, an analyst at the Pembina Institute for Environmental Studies, called bitcoin mining a "parasitic process" - which he described as "an energy nozzle [as it requires] the world's cheapest electricity".
On Monday, the UN Climate panel issued a dire warning, drawing attention to the "irreversible" effects of climate change and warning that people were dangerously close to the escaping heat.
Alex De Vries said the report raised warning flags for bitcoin mining projects around the world. "Even if these miners are not in Alberta, they will certainly end up in different places where they are likely to work with fossil fuels anyway," he said.