Digital currency mining boom in Vancouver

Bitcoin’s boom has caused mining companies to trade in their picks and axes for graphics processor units. The price of bitcoin continues to rise and has ignited comparisons to a financial bubble. The growth of digital currencies has had a significant impact on Graphics Processing Unit (GPU) manufacturers such as Nvidia and AMD and has opened opportunities to Canadian entrepreneurs. 

Tech-savvy companies such as Vancouver-based HIVE Blockchain Technologies Ltd. have reaped enormous rewards and share prices have soared. The blockchain infrastructure firm garnered an estimated market value of over C$600 million after they transitioned from a gold mining company to a digital currency miner. So what is bitcoin mining and how do they use computers to dig for ‘digital gold?’

What is Bitcoin mining? Bitcoin was designed to rely on a network of miners. As opposed to digging in the ground to mine precious metals, digital currency ‘mining’ is the process of earning digital coins by performing complex mathematical puzzles. Miners are not just paid in new Bitcoins, but in fees for confirming transactions that take place on Bitcoin’s ‘blockchain.’ These blocks in the blockchain independently validate and record transactions in a secure and immutable record thereby replacing traditional banks by decentralizing the recording of the transactions through a public online ledger. Much like success in traditional mining, the key to successful digital mining is minimizing costs associated with the process.

Hive plans to mine different cryptocurrencies

Bitcoin mining requires massive amounts of electricity. It has been said that the entire world’s digital currency mining takes up as much electricity as the entire country of Ireland. As popularity increases so does the difficulty setting for mining bitcoin. Engineers should note that mining could once be achieved with home computers, but given its current value and scale, the majority of profitable operations are those with huge rigs of GPUs on an industrial scale.

Huge rigs of GPUs Hive was initially a gold mining company who changed directions in early 2017. “We’re quite lucky to be first out of the gate,” said Hive chief executive officer Harry Pokrandt, in a recent interview. Hive paid Hong Kongbased Genesis Mining Ltd., builder of the world’s largest ether mining facility, $9 million and gave it a 30 percent stake to acquire a new data center in Reykjanes, Iceland.

Hive plans to mine different cryptocurrencies, depending on which ones offer the best margins and build an inventory of coins on the expectation they’ll appreciate. They set up mining operations in both Iceland and Sweden to take advantage of cheaper cooling and electricity costs with Iceland’s geothermal and hydroelectric power generation costing less than other generation methods. Hive recently announced their Phase 3 Expansion at the Sweden GPU Data Centre that will be constructed this April for an estimated US$22M. Fellow Canadian tech firms could follow Hive’s lead here.