Municipalities begin pulling the plug on cryptocurrency miners

Industry’s mammoth electricity demands spark energy supply troubles, and even safety concerns

Less than one job per megawatt.

That’s the eye-popping estimated energy give-and-take required for the cryptocurrency mining industry—and it’s why more municipalities are putting the brakes on the electricity-gobbling ventures every day.

In Quebec, Magog is the latest of 21 municipalities in that region that has imposed a moratorium on future cryptocurrency mining activity.

The home of the Montreal Canadiens, the 21,273-seat Bell Centre, uses five megawatts (MW) of energy a day. By contrast, two cryptocurrency mining companies that have recently set up shop in former Magog factory buildings were set to use a combined 20 MW each day.

Even in Quebec, where hydroelectricity offers some of North America’s cheapest power rates, it’s ringing alarm bells.

“Cryptocurrency mining is not a very big job creator. The analysis we have shows that cryptocurrency projects will create less than one job per megawatt,” says Hydro-Quebec spokesman Marc-Antoine Pouliot.

“That’s pretty low if you compare it with data centers, if you compare it with the aluminum industry or other huge consumers.”

As a decentralized system, cryptocurrency relies on airtight network security, and pays miners to validate legitimate transactions—and in the process, add those records to a public ledger, or blockchain. However, cryptocurrency mining requires the continuous operation of high-powered computers to validate these transactions by solving complicated math problems.

In upstate New York, another spot where hydroelectricity has traditionally created cheap power rates, a surge in cryptocurrency mining activity recently forced the city of Plattsburgh to buy power on the open market—and saw residents hit with enormous energy bills.

Plattsburgh passed its own 18-month ban on cryptocurrency mines in mid-March, citing safety concerns over the amount of heat produced.

“There’s no opportunities for them (that) I know of to give back to the community in any way,” Plattsburgh councillor Dale Dowdle tells the Daily Orange. “They don’t employ many people.”

Energy utilities and regulators have mulled, and in some cases already approved, the concept of charging higher rates to crytopcurrency miners.

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