B.C. location claiming largest bitcoin miner

By Collin Gallant on November 9, 2018.

cgallant@medicinehathatnews.com @CollinGallant

An undisclosed location in southeast British Columbia is challenging the claim that Medicine Hat is home to the largest cryptocurrency mining facility in Canada.

DMG Blockchain Solutions, a Vancouver-based, publicly traded firm announced Thursday it has commissioned the initial phase of its 85-megawatt facility in the interior of that province.

That rate of power use is one-third more than is consumed by the recently commissioned Hut 8 data processing facility in Medicine Hat.

That facility, which has a 67-megawatt capacity, was held up as blockbuster deal for the company and the City of Medicine Hat’s utility division last March. It also only represents about 80 per cent of Hut 8’s operations, which include a server farm in Drumheller.

Activity in the emerging financial technology sector is also rated on speed of computation, not bare power-use, but the energy required is one measure, and the volume is massive.

“DMG now proudly owns one of the largest, most cost-efficient, Bitcoin mining facilities in North America,” said Dan Reitzik, the CEO of DMG, in a release.

“It was an audacious undertaking, but … we have the know-how and connections with the utilities and government agencies to pull it off.”

The release also quotes Fortis B.C. officials, who will supply the facility with hydro-electric power enough to supply 50,000 homes, but doesn’t mention an exact location.

It’s is described as 27,000-square-foot facility on a 34-acre site, with a new purpose built substation.

Fortis officials say the facility is one of the largest customers they’ve ever connected to the grid, but in general it’s difficult to compare its size to others in the highly secretive sector that’s also home to privately-owned companies.

Shares of both Hut 8 and DMG are publicly traded, leading to certain disclosure requirements.

The two companies do operate differently.

DMG advertises mining-as-a-service contracts, meaning they contract their facility to other miners, whereas Hut 8 itself seeks out to verify Bitcoin and other digital currency transactions to earn a fee.

The locally operating company also touts technological advantages it has and status as a listed companies as a selling point to investors.

Hut 8 released its own third-quarter financial results on Thursday, stating it earned record profits in its first three months of having Medicine Hat fully operational.

It mined, or created about 2,000 Bitcoins in the three-month period ending Sept. 30.

Its net revenue was $17.6 million, marking a 51 per cent profit margin on mining activities.

Hut 8 also describes itself as the largest publicly traded cryptocurrency firm, relating to its market capitalization. Based on its share price at Thursday’s close, the company is valued at about $232 million — about 10 times greater than DMG.

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