Amid fear of environmental hazards resulting from the huge energy demands of cryptocurrency mining, indications are beginning to point toward the imminent closure of the largest mining farm in Medicine Hat. Hut 8, Canada’s largest cryptocurrency mining operator has been pipped as the first culprit going by its overwhelming energy usage in the mining farm situated in southeast Alberta.
The Toronto based company, which declared itself as the “largest publicly traded” operator by capacity following the completion of its second mining facility earlier this year, has been consuming 10 times more than the average demand of other mining facilities in Medicine Hat—a city with a population of 60,000 people.
In spite of contributing positively to the economic well-being of the city, the energy requirements of the mining farm have rattled both residents and environmentalists to an extent that spurred authorities in making legislative provisions to cut Hut 8’s electricity demands when necessary.
The alarming increase in heat waves has been a cause for worry among residents and this was evident in July when energy usage across Ontario reached an unprecedented height in years. Residents sought solace in their air conditioners just to beat the vent from the all-time high humidity levels.
The reliance on fossil fuels for consuming such energy levels has filled environmentalists with so much chagrin. They consider the use of fossil fuels a potential danger and think the ridiculous electricity usage is frivolous. The fact that the source of such high energy usage is not renewable makes it a very sensitive issue.
“(Hut 8) could have gone anywhere in the world and they chose Medicine Hat. (Hut 8) is not here for renewable energy because it is not reliable. (Hut 8) need gas-fired generation and we have it in spades.”
Ted Clugston; the Mayor of Medicine Hat told CBC.
The company’s mining facility situated in fifty-six shipping containers on the outskirts of townhouses 180 servers mining Bitcoin and seems to be perceived as an environmental nuisance in spite of its enormous cost.
Coupled with its secondary Canadian operations, the company claimed to have mined over 3,300 BTC (estimated at $21.8M) since December 2017. The Medicine Hat facility currently generates 20 BTC ($132,000) daily.
Bitcoin Energy Usage
Greenpeace spokesperson; Keith Stewart is believed to have peddled the series of misconceptions reported by CBC. Quoting him; “the bitcoin (sic) algorithm works is that it’s designed to waste as much electricity as possible. And the more popular bitcoin (sic) becomes, the more electricity it wastes.”
This well-fabricated misconception has left much to be desired. His claims are in stark contrast to the take of Bitcoin evangelist and prolific speaker, Andreas Antonopolous. While shedding light on Bitcoin and electric usage, he said:
“If the (Bitcoin) system was 10 times bigger, with 10 times more users, it doesn’t need 10 times more mining – what we have is enough. There’s a profit motive that drives it, but it’s a mistake to think that if simply (Bitcoin) goes global, (the energy cost) will also multiply, quite the opposite in fact. Over time, the reward for (Bitcoin) mining decreases, and as a result, it is more likely we will see (the energy cost) gradually taper off and plateau.”
The need to ensure the Bitcoin network remains at its peak performance-wise cannot be overemphasized especially because of its relevance as a life-saving infrastructure which can bail any economy in cases of natural disasters such as heat waves.
Antonopolous is of the opinion that the heavy reliance of Bitcoin on the consumption of electricity has the capacity to trigger green energy innovation.