BC Hydro, a state-owned electric utility provider in the Canadian province of British Columbia, has paused new electricity connection requests from cryptocurrency miners for 18 months “to support the province’s climate action and economic goals.”
“Cryptocurrency mining consumes massive amounts of electricity to run and cool banks of high-powered computers 24/7/365, while creating very few jobs in the local economy,” Minister of Energy, Mines and Low Carbon Innovation Josie Osborne said in a media release Wednesday.
The suspension would target cryptocurrency miners who have yet to connect to the grid and those that were in the early stages of getting hooked up.
Existing Bitcoin mining operators and those who are “well advanced in the BC Hydro’s connection process” would not be affected.
What Is Bitcoin Mining?
Bitcoin mining is the process by which blocks of transactions are added to the public blockchain and verified. It’s also the process by which new Bitcoin is created—a mechanism that both secures the integrity of the blockchain and incentivizes participation in the network. Miners compete to add new blocks to the blockchain. Mining Bitcoin demands a substantial commitment on the part of miners; it’s a costly, time-consuming task, and one that’s necessary for the cryptocurrency to work and for peo...
Environmentalists have criticized Bitcoin for its energy expenditures, with many comparing the network's consumption to that of entire countries.
The Bitcoin network relies on the Proof-of-Work (PoW) consensus algorithm, which requires plenty of energy as Bitcoin miners compete to crack cryptographic puzzles and keep the blockchain secure while earning rewards for their efforts.
Enough energy to power 570,000 homes
According to the Canada Energy Regulator, about 87% of British Columbia’s electricity is generated by hydropower, which has attracted “unprecedented interest” from crypto miners, according to the province's government.
The ministry said BC Hydro is currently serving seven crypto-mining operations and has six in the advanced stages of connection, totaling 273 megawatts of power.
Additionally, the province is facing requests from 21 projects with a projected power usage of 1,403 megawatts—enough energy to power 570,000 homes or 2.1 million electric vehicles for a year. All of these requests will now be suspended.
The Hard Truth About Bitcoin's Energy Consumption
Bitcoin recently broke $60,000 for the first time, cementing its perch as the “big dog” of cryptocurrencies. It has been embraced by groups as disparate as politicians, NFL stars, and Tesla CEO Elon Musk. And the fact that cryptocurrency is entirely digital makes it sound, in theory, as though it would be the greenest currency the world has ever seen. After all, unlike paper money, no trees have to be cut down to create Bitcoin. But people and press have become increasingly concerned about whe...
The decision follows a similar move by the province of Manitoba last month in response to concerns that cryptocurrency operations have a high environmental toll by pulling in massive amounts of electricity with little economic payoff.
Hydro-Quebec looks to follow the same avenue, too, asking the provincial regulator at the beginning of November to suspend the energy allocation process to cryptocurrency miners.
