Companies that mine cryptocurrencies are now creating their own electricity to power their operation according to multiple sources.
Cheap electricity is a very important factor in crypto-mining and is the reason many mining companies choose provinces in Canada. The cold weather prevents the computers and servers from overheating and hence Canada is seen as a crypto miner’s paradise.
The cryptocurrency industry is a new one and is susceptible to vulnerability. By building new substations to generate electricity for their own use, these companies hope to maximise on their energy efficiency and reduce power bills.
According to reports, the Canadian crypto miner DMG Blockchain is building a substation near the Southern British Columbia town of Castlegar, which is electrified by hydro power. The project will cost millions of dollars and also requires the company to build its own access road to the substation. The company hopes that it will power the mining operations from September this year.
Cryptocurrency mining is painstaking, expensive, and only sporadically rewarding. Some experts have compared with the California gold prospectors of 1848. By mining cryptocurrency, you can own it without having to ‘buy’ it.
Bitcoin mining is the process of earning bitcoin in exchange for running the verification to validate bitcoin transactions. These transactions provide security for the Bitcoin network which in turn compensates miners by giving them bitcoins. Miners can profit if the price of bitcoins exceeds the cost to mine.
There are many professional mining centres which use large amounts of computing power and hence consume a lot of electricity. Crypto-Miners basically get paid for their work as auditors. They main job is verifying previous Bitcoin transactions. This convention is meant to keep Bitcoin users honest and was conceived by Bitcoin’s mysterious founder Satoshi Nakamoto.
Across the world there has been a huge demand for crypto-mining operations in places with access to cheap power and cool weather. Cryptocurrency mining is a process through which new virtual coins are discovered on the block chain network, and through it, the transactions are verified and added to the blockchain public ledger.
While the rewards of mining appear lucrative, the process is complex, time intensive and energy consuming. The mining process is set up in such a way that if more miners attempt to mine the available currency, it becomes harder to mine.
DMG Blockchain’s power substation project could be the beginning of changes to come in Canada’s cryptocurrency sector and can change the way the power companies deal with crypto mining companies.