Cryptocurrency Miners Are Building Their Own Electricity Infrastructure (vice.com)

ted_pikul shares a report from Motherboard: Access to cheap electricity can make or break a cryptocurrency mining operation. The latest move in the quest for bargain-basement power rates: building out local power grids. Canadian company DMG Blockchain is building what it hopes will be a fully-functioning substation in Southern British Columbia, which is electrified by hydro power. Building the substation is costing millions of dollars and required building an access road to haul equipment. "[...] the utility will test everything as a completed substation and make sure that the town doesn't blow up when we flip the switch," Steven Eliscu of DMG Blockchain said.

Comments

Oh Lord

[rsilvergun]

I know this isn't a popular opinion around here, but man, there is something deeply wrong with this much effort being extended for what at the end of the day amounts to little more than a vehicle for money laundering. Folks do know that if crypto ever gets big enough for the big boys to take notice (re: Goldman Sachs) they'll have it under their thumb in no time, right? We're talking about a market that a few guys in China were able to manipulate.

Heck, just legalizing Pot would be a huge blow to the price of crypto currencies and that's more thank likely coming (assuming we can get "tough on crime" conservatives with ties to private prison lobbies out of the way). If we finished the job by legalizing all drugs and treating the hard stuff as a medical problem like the Scandinavians do then all you'd have left is generic money laundering and a few traders playing games.

I'm just saying that we as a species have better things to do with the miracle that is electricity than to make it easy for some guy to get his fix or to hide a bit of dirty money...

Re:Oh Lord

[Anonymous Coward]

I know you are entitled to your opinion, ( its a free country ) but it seems to me that you are shilling for big finance? ( i.e. Goldman Sachs). First of all let me say, Bitcoin is a lousy vehicle for money laundering, since all transactions are permanently recorded on the blockchain. If laundering money is your thing, then the current system ( fiat ) is the best there is, look at the actions of HSBC. Goldman Sachs would likely never want to get Bitcoin under their thumb, if it made them money or they could control it they would have already. Its the very fact that efforts of organizations like DMG is going to make their 'take over' very difficult, it is also the efforts of DMG that will also thwart the ever increasing influence of the Chinese. Finally unlike the fiat system which embraces corruption, cronyism and just outright theft. Basing your money and savings on a decentralized from of security and trust, keeps everyone honest. Also, notice the electricity to power the miners in this case is coming from clean hydro. Its win win

Re:Oh Lord

[Anonymous Coward]

Yes, it's used only for money laundering. ...on a public ledger that anyone (governments included) can read. ...where the only place to get cash to an exchange to purchase bitcoin is through a regulated bank. If you are attempting to launder money using bitcoin, you really are a special kind of stupid. By your logic, *all* cash transactions are money laundering. If that were true though (it's obviously not), it would be much smarter using a money system with no public ledger or transaction record of any kind (i.e. fiat cash).

Re:Oh Lord

[magzteel]

I know this isn't a popular opinion around here, but man, there is something deeply wrong with this much effort being extended for what at the end of the day amounts to little more than a vehicle for money laundering. Folks do know that if crypto ever gets big enough for the big boys to take notice (re: Goldman Sachs) they'll have it under their thumb in no time, right? We're talking about a market that a few guys in China were able to manipulate.

Please take the time to research cryptocurrency. You completely missed how and why it was started and being used. It was designed so NO ONE can control it, own it, track it. So big banks and government can't charge fees or taxes on the money. Yes there are some bad actors that are using it for laundering but that comes with all currencies.

This is just wrong.

Governments don't tax the currency, they tax transactions and the gains made in currency trading. No matter what currency you buy a car with you still have to pay the sales tax.

Banks can charge fees on anything.

Goldman is already involved in cryptocurrency trading and has launched its own cryptocurrency. On both of those they will make money on transaction fees and prop trading, For the latter they will not hold a huge position without a hedge, it would exceed their risk tolerance.

Re:Oh Lord

[Anonymous Coward]

It was designed so NO ONE can control it, own it, track it. So big banks and government can't charge fees or taxes on the money.

I would argue that they have failed to achieve their stated design goals. Consider that a few big miners now control over half of the Bitcoin mining capacity. Not a monopoly yet perhaps, but certainly an oligopoly. As for tracking, the ledger of all transactions is public for all time. All it takes is one mistake linking your RL identity to a bitcoin wallet ID and your entire transaction history is laid bare. The belief that governments can't or don't track cryptocurrency transactions when the ledger is public is crazy. As for fees or taxes on the money, it's the miners collecting the taxes in the form of transaction rewards for putting your transaction into their next computed block. There are plenty of transactions available to potentially fill the next block and any number of them will do equally well for that purpose so why should they include yours? Because you offer a reward to the successful miner who includes your transaction in their next block and wins the verification race. Now supposedly Bitcoin was started as an experiment but I think if we're going to be honest we have to say that what Bitcoin has become is not what it's designers had hoped for. It's a speculative commodity controlled by a few big players and a positively terrible method of payment, particularly for everyday transactions where the designers had most wanted it would be used. Buying a $5 cup of coffee with a $40 transaction fee (Bitcoin block reward) and verification time measured in hours is not a viable alternative to Visa, MasterCard or cash.

Think of the polar bears. SIGH

[Dorianny]

If Climate change wasn't a worry the this topic wouldn't even be worth discussing.

Unfortunately it is and cryptocurrency mining is just making things slightly worst

Re:Think of the polar bears. SIGH

[blindseer]

This cryptocurrency mining might be a dead end in short order but I'd think that building these sites are pretty low risk investments. Suppose the mining doesn't pan out, they still have a data center at a site with the cheapest electricity rates they could find. They can still rent out the computing power for lots of things, and it seems to me that there have been a lot of data centers opening up all over North America.

If someone can figure out how to get solar thermal to provide 24/7 power to one of these data centers then that's a bonus for a selling point, they'd have reliable power for running the computers. Put in redundant network links, such as a telco provided main link and satellite backup, and that would be a site that keeps running through a zombie apocalypse.

If we are speculating on getting power to these sites then consider this, micro nuclear power plants. There's been people building nuclear power plants as small as 5 MW since the 1950s, back when they were still figuring out how to make it work. A more reasonable size might be more like 50 MW. I don't know how much power a typical data center uses but if the goal is reliable, cheap, and low carbon, energy source then nuclear is just as good as solar or hydro. The problems for such a reactor is legal, not technical. There's a lot of people out there with experience building and operating these reactors. They weren't called a "small modular reactor", or "micro nuclear power plant", they were called a "naval reactor". We just need to work on the laws that make it so expensive to run outside of a military submarine.