by Koleya Karringten
When I first started getting interested in Bitcoin, what really captured my imagination was the unique technology behind the world’s first digital currency. A whole ecosystem of advanced computers racing to solve a complex mathematical puzzle, with the winners receiving a prize – and maintaining the security and integrity of the network at the same time. It’s a fascinating process.
How does it work? It’s all about transactions – miners receive Bitcoin as a reward for completing unique “blocks” of verified transactions, such as sales or purchases, which are then added forever to the massive Bitcoin blockchain, which can never be altered.
The likelihood that a miner will be the one to discover the solution is related to their portion of the total mining power on the network, causing miners to join their individual power – or hash rate – together in mining pools, making it very much a team sport.
The more I learned, the more I wanted to be a part of what I believed was the future of money. I went all-in, and transformed the basement of my house into a mining operation, installing heavy duty shelves and cooling equipment and buying the latest hardware. It was a great experience that taught me a lot – and left me with an enduring appreciation for the industry.
With countless articles in my news feed lately, it’s clear that Texas also appreciates crypto mining. Earlier this summer, state Governor Greg Abbott made it clear in a series of policy announcements and tweets that Texas was open for Bitcoin business, with dozens of major Bitcoin miners, in urgent need of moving locations, announcing plans for new facilities, like BIT Mining’s $25M data center.
Local officials, like the mayor of Rockdale, TX, are also making news for their support of major new Bitcoin mining projects, including a Bitmain project to repurpose an old aluminum plant into a large-scale data center. Across the state, it’s become a renaissance for the economy, and rapidly accelerating due to what’s being called the Great Crypto Migration out of China.
Why are miners looking for a new home? In the last few months, China, which hosted the majority of the world’s hashing power, has announced a series of restrictive policies that are making it impossible for miners to operate. Millions of mining rigs, many operating on power from the country’s massive hydroelectric dams or coal plants, have been displaced in a short period of time.
Motivations for this move are still speculative – the Chinese government has made claims about concerns over BTC’s sustainability, but others believe that the country needed the power for big upcoming manufacturing projects, and that it also wanted to limit participation in Bitcoin to remove competition from its Digital Yuan, which will be one of the world’s first Central Bank Digital Currencies.
Regardless of why, the mining industry is now in the difficult position of needing to move and host an incredible number of miners, and for that, they need inexpensive power and friendly local governments. In the case of Texas, Governor Greg Abbott has even been announcing plans for BTC acceptance at grocery stores, and has moved for the state’s banking sector to support crypto services.
He wisely understands that the benefits go far beyond just the jobs created by data centers, the taxes paid by companies, and or the fees for energy consumption. Bitcoin mining builds a whole ancillary economy that involves technology firms, hardware and chip manufacturers, cloud providers and a whole range of other services and products.
Just like our oil & gas industry spawned a massive number of technology, product and service companies in its orbit, crypto mining does the same for the new digital world, and has a flow-over effect of innovation and job creation that impacts the rest of the economy. Crypto mining is just the beginning.
Other governments are now seeing the economic benefits. At June’s Bitcoin 2021 conference in Miami, where more than 10,000 people gathered to learn about the latest technology and thought leadership, mining was a huge part of the story. The now-famous announcement by El Salvador that the country had a pending bill to make BTC legal tender was followed up by the revelation of plans to build a massive, state-run sustainable mining operation using the country’s abundant geothermal power. Changing an economy needs leadership, and this has to come from the top down.
Without Governor Abbott’s strong support, Texas wouldn’t have become the next big Bitcoin mining hub, and Alberta needs the same public sector backing if we’re going to compete with other energy producing regions. And it’s also good for the energy concerns around crypto mining, because Alberta’s high regulatory standards will help improve the overall ESG profile of Bitcoin.
Canada is already a prime target location for displaced Chinese mining operations, or for US miners looking to expand internationally. Just last week, Black Rock Petroleum Company and Optimum Mining Host announced a joint project to move as many as 1 million mining rigs to Canada, most of which will operate on Alberta’s abundant natural gas.
This is a huge project that could have a major economic impact on our province – and in our ecosystem, I’m hearing a lot of news about other companies planning expansion of existing sites by bringing in equipment or partners from China. Alberta spent an incredible amount of money trying and failing to lure tech companies like Amazon – we could benefit tremendously from making an effort towards supporting the Great Crypto Migration.
In addition to helping support our technology economy, it’s an incredible new revenue stream for our oil, gas and renewables companies, one that can help fund new projects and support their operations. Innovative producers are now seeing the advantages of partnering with mining companies to become Bitcoin firms, a creative merger of our traditional and emerging sectors.
This is a rare moment in time when Alberta’s natural advantages and innovative technology industry can work in synergy to help build a new economy – one that leverages the economic benefits of Bitcoin mining to attract tech leaders and support a new ecosystem of blockchain start ups. We have a great opportunity, and should look to Texas as a model for our own success.
About Koleya Karringten
A proud Albertan technology entrepreneur, advocate, and leader, Koleya Karringten has a unique perspective on the challenges and opportunities of product commercialization, ecosystem building and fostering inclusion in the technology industry. As the co-founder and CEO of Absolute Combustion, she has spent over a decade successfully designing and developing ground-breaking cleantech solutions for multiple industry sectors, including aerospace and Oil & Gas.
She is a driving force in Canada’s blockchain technology industry as the Executive Director of the Canadian Blockchain Consortium (CBC) and co-founder/board member of the Canadian Blockchain Association for Women (CBAW) To learn more about Koleya visit Koleya.ca