Canada’s largest cryptofarm official

By Collin Gallant on September 22, 2018.

cgallant@medicinehatnews.com @CollinGallant

Amid the ever-present hum of thousands of cooling fans, dignitaries cut the grand-opening ribbon on the Hut 8 data processing facility.

The Hut 8 Crypto-mining operation near Box Springs Road has been up and running since last month, ahead of a construction schedule and the largest strike into the emerging technology sector in Canada, according to company officials.

“We’re exploring (options) at different facilities,” said CEO Andrew Kiguel. “The target is to continue growing. We’ve just completed this, which is the largest cryptofarm in Canada. But we are planning and might have more to announce.”

The company and city announced in March the power supply agreement and land lease for 11 acres.

Site construction began immediately ahead of initial equipment delivery in June, then an expansion in August.

The site itself is not what many of Friday’s delegates say they were expecting.

“I’m surprised they got it built this fast,” said city councillor Jim Turner after the tour. “I really am.”

Rows of stainless steel trailers the size of shipping containers line the site, each with 180 processing units (nine high and 20 wide) stacked against an open wall that exhausts heat into alleyways that waver and ripple the view of the countryside.

On the opposite walls, fanned filter systems draw in air to control temperature that’s monitored from a central control room that’s manned 24 hours a day as three shifts of workers attend the boxes, fix faults and keep the units working on complex mathematical problems.

The facility connects buyers and sellers of digital currency, earning a transaction fee when it’s done more quickly than other “crypto mine” operations.

That requires an incredible amount of power — about 60 megawatts during the tour on Friday, or about 10 times more than is required to operate petrochemical plants located across Box Springs Road.

Company officials say that requires the entire production from the Unit 16 power plant commissioned in late 2016 to backstop the city’s power needs.

“We’re one of the most unique municipalities in Canada,” said Mayor Ted Clugston at the ribbon cutting.

“We’re in the business of making and selling electricity and we have a first-class customer right here beside the (new Unit 16) power plant.”

“It’s a profitable venture for the City of Medicine Hat and Hut 8.”

Terms of the contract are secret, according to both parties, though earlier this year city administrators tripled their power profit forecast to about $33 million this year thanks both to higher prices and new major customers.

In another section of the Hut 8 facility, a crew of five take apart, rebuild and assemble computer boards.

Some of those workers, along with many of the 40 permanent employees, remain from the original set-up crew that assembled the 11,000 or so computer boards that were built in a Redcliff warehouse.

“We’re very proud of what’s been done here,” said Jeff Mason, a former rock mine developer who is a director with Hut 8 and oversaw the construction. “And we’re proud of the people and that it’s all been done in Medicine Hat.”

Aside from an original training staff brought in from other locations, Mason said, most of the 40 workers on the site are from the Medicine Hat area.

The addition of the Medicine Hat facility quadruples the size of the company’s operation and makes it the largest crypto miner in Canada by a factor of three.

The company previously operated a 17 “black box” field near Drumheller, which required about 18 megawatts of electricity.

Last month’s expansion in Medicine Hat added 16 boxes to 40 that were installed and operating in June.

During a tour of control room, Mason the company scales back operations at the city’s request, and city officials as well worked to assure residents power supply is sufficient for all users.

“We’ve just survived one of our hottest summers, and the air conditioners still cam on, and the servers as well,” said Clugston.

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