The largest cryptocurrency company in Quebec, Bitfarms, laments the province’s lack of consideration for the industry and threatens to continue its expansion beyond its borders if it continues to be ignored in this way.
“We have been trying unsuccessfully for months to have discussions with Hydro-Québec and the government. We want to triple the size of our business by the end of the year and nothing is happening, laments Geoffrey Morphy, president of Bitfarms. This is not what we want, but if we continue to be ignored in this way, we will have no other choice but to invest our millions elsewhere. “
Founded in Brossard in 2017, Bitfarms has already established five cryptomining centers in the province. The latter are located in Farnham, Saint-Hyacinthe, Cowansville, Magog and Sherbrooke, where the technology company occupies, among other things, the former Sherwood hockey manufacturing plant.
The Toronto-based company, whose shares are now traded on the TSX Venture Exchange, specializes in bitcoin mining, which involves solving – using powerful computer systems – complex cryptographic problems for the Bitcoin network account.
Electricity bill of $ 23 million
The problem is that bitcoin mining is a particularly energy-intensive activity, which worries Hydro-Quebec, which is watching over its electricity reserves. For example, Bitfarms alone consumes 69 megawatts (MW) of electricity, the equivalent of the average consumption needs of 25,000 single-family homes. His last electricity bill was around $ 23 million.
Never mind, the operation seems lucrative. For fiscal 2019, Bitfarms’ revenue exceeded US $ 32 million, making it the largest of over 100 industry companies in the province. In addition to its president, based in Toronto, Bitfarms has 90 employees, all located in Quebec.
But the company is ambitious and maintains that it can easily add about twenty workers to its services, if only Quebec ends up showing the slightest interest in the tens of millions that the company says it is prepared to invest here in the short term.
His project: the construction of a sixth cryptomining center in the province, the largest ever. With an initial surface area of 100,000 ft2, the production unit would require, in addition to the building, investments of $ 50 to $ 100 million in equipment.
Electricity from Quebec to the US?
To operate them, at least 50 MW would be required, in addition to the 69 MW already in use.
“We never asked for a grant. All we want is to be able to quickly discuss the best location for such a center in Quebec. It’s an open invitation: Hydro, Pierre Fitzgibbon, whatever …, we want to move forward. “
President of Bitfarms
Society has the wind in its sails. Since the start of the year, its stock has grown 73.6% on the stock market and it has managed to conclude, in quick succession, two rounds of financing with American investment companies totaling $ 40 million.
Cautious in the face of such haste, Hydro-Québec recalls that the sector is currently subject to a moratorium and that no one can make a decision before the Régie de l’énergie du Québec rules on this matter.
“We are subject to the Régie’s decisions,” says its spokesperson, Jonathan Côté. In the meantime, there are no plans to grant additional capacity to this industry. These are the rules; we have to follow them. “
A position that frustrates Bitfarms, especially since it claims to be courted by several other jurisdictions. In October, it signed a letter of intent in Latin America to use 200 MW of electricity, at an average price of US $ 0.02 per kilowatt hour, or half of Hydro’s tariff.
She also says she is welcomed “with open arms” by three other Canadian provinces and at least as many American states.
“I just had discussions with a governor. The interest is great. Sometimes I wonder whether we will not end up in one of the neighboring states of Quebec which, unlike, will agree to sell us the electricity that comes directly from Hydro-Quebec. This is nonsense. “
Imminent decision of the Régie de l’énergie
After two years of work, a decision by the Régie de l’énergie du Québec will not delay in the contentious file of the cryptocurrency industry.
“We would all have hoped for a faster decision, admits Jonathan Côté, spokesperson for Hydro-Quebec. We are now hoping for a decision by the spring, maybe sooner. “
Between 2017 and 2018, Hydro-Quebec was inundated with electricity demands from cryptocurrency miners around the world. 300 requests had been made to it, for a total of 18,000 megawatts (MW).
Panic-stricken, after having nevertheless granted it 400 MW, Quebec imposed a moratorium in July 2018 and asked the Régie to define the framework and the conditions of service of this sector, known for its strong fluctuations and a still uncertain sustainability. .
Today, the sector has a little less than 100 companies in Quebec for an available power twice as important as the growing sectors of data centers (200 MW).