Tempers are flaring in Quebec, as its climate and relatively cheap electricity have made it a magnet for the burgeoning cryptocurrency mining industry. The provincial government and its energy concern, Hydro-Quebec, have been accused of playing favorites to the likes of mining giants such as Bitmain.
Quebec Mining Drama Continues and So Does Debate About Influence
Quebecers are known for their regional passion. They’ve openly fought to preserve their French roots in language, for example, and are provincial in the extreme, patriotic sense; at least that’s the dominant impression. And so when economic concerns arise, politicians and industry are expected to favor locals.
Quebec has among the lowest, if not the lowest, rates on the continent. Miners have sought its favorable conditions through last year and up to the present, leaning on cheap electricity produced by Hydro-Quebec. It seemed a match made in bitcoin heaven, and for a time the province embraced the rush. Hydro-Quebec contracts fetched multi-year deals. The getting was so good, however, it became worrisome.
By Spring of this year, the energy supplier hit the pause button on future deals, as applications were overwhelming in number. Some experts even suggested that, in its zeal, Hydro-Quebec actually oversold electricity packages to miners, threatening even domestic supply. It seemed mining and Quebec were about to divorce as a result.
Around the same time, Quebec Premier, Philippe Couillard, voiced snide sarcasm at mining prospects. “There needs to be added value for our society,” he said, “just having servers to do transaction mining and acquire new Bitcoins, I don’t see the added value.” That malaise remained until early Summer, when, as regional news organization Les Affaires revealed recently, “Declaring nothing about its economic activities or the number of employees in Quebec, Equipement Bitmain was registered in Quebec on June 14th exactly one week after the Quebec Minister of Energy announced a moratorium on new cryptographic projects.”
Tweetstorm Gathers Steam
Within the mining space, Bitmain has considerable muscle and leverage. The China-based juggernaut has enjoyed considerable, and very public, success(reportedly $4 billion from 2017 alone). It does seem to be everywhere, from investing in decentralized marketplaces such as Openbazaar, opening a repair center in Russia, establishing a branch in Switzerland, and those are just in the first half of this year.
Bitmain was also rumored to be looking for a North American foothold, and from Washington state in the Pacific Northwest to Quebec were top contenders. According to media accounts, and at least one local advocate, Bitmain lobbied Hydro-Quebec and relevant politicians to lift the moratorium. Well known regional players such as Jonathan Bertrand took to social media to suggest something sinister was afoot.
Claiming his sentiment is shared by other local miners, Mr. Bertrand complained of a lack of transparency. Indeed, he lamented, a closed auction formula was used to squeeze out smaller mining outfits. Mr. Bertrand also suggested such an arrangement was due to Bitmain lobbying. He is incensed by mining applications being reopened, seemingly as a result of favoritism.
Mr. Bertrand also believes Bitmain faked applications, forcing Hydro-Quebec’s hand when it came to selling electricity in its favor. The idea, according to his theory of events, is for the mining giant to gain such a stranglehold locally that other miners are pushed out altogether. And that conspiracy gels well with an increasingly broader opinion such corporate giants put at risk the very notion of crypto decentralization. For its part, Bitmain maintains its success is due to the age old adage of satisfying customers and delivering great products.
Are Quebecers over reacting or is Bitmain a threat? Let us know in the comments section below.
Images via the Pixabay, Twitter.