The Canadian Mining Landscape
Mining discourse generally references “North America” collectively or “the U.S.” individually. But Canada plays a significant role in bolstering the hash rate staying online across the North American region. And, for the most part, Canadian miners endure much harsher climates than their southern counterparts. For example, Upstream Data CEO Steve Barbour
shared pictures on Twitter of the underappreciated, destructive effects of harsh Canadian weather on bitcoin mining operations. Frozen cables, iced hardware and large snow drifts do not make for ideal mining conditions.
But some of the most well-known public and private mining companies operate or are headquartered in Canada. For publicly-traded firms, the list includes Bitfarms, SATO Technologies, Hut 8 and more. The roster of private companies based or operating in Canada includes Compass Mining, Bitfury, Upstream Data and others. Nearly all of these brands are quasi-household names in the bitcoin economy and often play key roles in advocating for and educating about Bitcoin. Canada’s footprint in the bitcoin market is not small.
Reacting To Regulatory Changes
Local hostility to operational bitcoin mining expansions may be recent news in Canada, but the broader industry is no stranger to this sentiment. The entire industry
banded together to vociferously oppose a proposed two-year moratorium in New York for fossil-fuel-powered mining expansion projects. In late November 2022, the bill passed. The move was cheered by other left-leaning politicians. And Canada seems to be copying their playbook. Canada’s new posture toward miners also imitates another international mining hotspot: Kazakhstan. After absorbing an abundance of mining activity that left China, Kazakhstan started proposing power consumption limitations for new mining activity in October 2021.
So, how are Canadian miners reacting?
News of Quebec’s proposal to suspend any new grid connections was widely
shared among Bitcoin social circles on Twitter. Unsurprisingly, the chatter was uniformly negative and critical.
Upstream Data’s Barbour was not altogether shocked, though. Taking to Twitter, he
noted that Quebec is “once again” censoring bitcoin miners. Why are the proposed grid connection limitations unsurprising? Because miners “compete with utilities,” according to Barbour. “Expect increasing discrimination,” he tweeted.
Despite changing regulatory sentiment, some of Canada’s biggest miners still plan to expand. Bitfarms said it “continues to look to expand its operations in Québec and add more jobs across the region” in a
press release published shortly after news of Hydro-Quebec’s proposal broke. Quantifying Bitfarm’s impact on the local economy, the press release added, “Bitfarms has invested over CAD$350 million in Québec since its inception and currently employs over 100 employees.” Canada’s Choice
Political favor or hostility toward Bitcoin ultimately means very little for the long-term success of the network. In the short term, however, regulatory limitations can make life very difficult for mining companies trying to process transactions and find new blocks. Any regulatory opposition from Canada is highly unlikely to rival China’s all-out ban from 2021. But multiple localities suspending all new requests for grid connections is extremely disruptive all the same.
Canadian provinces now face a choice: risk losing hash rate to other jurisdictions or embrace mining and the heavily-documented socioeconomic benefits it affords.
This is a guest post by Zack Voell. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.