Alberta Emerges as Canada’s Crypto Mining Hub
Alberta is quickly becoming a hotspot for blockchain companies as bitcoin prices recover and cryptocurrency fundamentals strengthen. Toronto-based Hut 8, one of North America’s largest publicly traded digital asset mining pioneers, is currently conducting testing at its Drumheller site in southern Alberta, its second location in the region. In its monthly update, Hut 8 reported the production of 131 bitcoins in March, averaging 4.2 per day, and held 9,133 bitcoins in reserve.
Bitcoin’s value has increased by approximately 70% this year after a turbulent 2022 marked by crashes and scandals. Hut 8 revealed that the difficulty level for mining bitcoin increased by 10.67% month-over-month, indicating growing demand and the strengthening bitcoin network. Investors are renewing their interest in digital currencies as an alternative to traditional banking systems and anticipating a possible slowdown in the Federal Reserve’s interest rate increases.
Rising operating costs have become a concern for companies like Hut 8 as more powerful computers are needed to solve complex computational problems, consuming more electricity. Hut 8 operates 36,000 sq-ft of geo-diverse data center space and cloud capacity connected to electrical grids powered by renewable and predominantly emission-free sources. The company aims to develop the first hybrid data center model serving both traditional high-performance computing and the emerging digital asset computing sectors, including blockchain gaming and Web 3.0.
However, crypto-mining’s high power consumption and carbon-intensive nature have drawn criticism, leading to moratoria on new connections to power grids in British Columbia, Manitoba, and Quebec. Hut 8 previously closed a facility in North Bay, Ontario, following a dispute with local authorities over a power purchase agreement, leading to its relocation to Drumheller. Despite such challenges, investment houses like Calgary-based Stifel have initiated coverage on new firms in the sector, highlighting the industry’s growth potential in Alberta.
