Canada Declares a Local War on Bitcoin Mining

After China’s abrupt ban of bitcoin mining in May 2021, North America was the most active hub for bitcoin mining activity. The United States has been the most prominent news source and has received a lot of investor attention. However, Canada has also established itself as a global leader of mining. Canada is home to many different types of miners, including industrial mining farms and off-grid guerrilla operations. However, Canada has also been a major player in mining. Several provinces targeted bitcoin miners and suspended any new grid connections while “environmental assessment” was conducted. This article gives an overview of local regulatory changes toward miners. According to the proposal, the Canada Energy Regulator was asked to suspend the allocation of 270 megawatts requested cryptocurrency miners. Bitcoin miners in Quebec know that local regulations are too restrictive to allow for easy growth. However, this proposal would have the Canada Energy Regulator suspend the allocation of 270 megawatts requested by cryptocurrency miners. Manitoba announced plans to stop any new connections to the electric grid for cryptocurrency mining operations. According to the provincial finance minister, the suspension will be in effect for 18 months starting in November 2022. This is to allow for a review on the externalities of the mining industry’s energy needs. For now, the 37 Manitoba-operating mining facilities will not be affected. According to CBC, 17 operators have requested new connections in recent months. British Columbia was the first to make headlines for its efforts against mining growth and to assess the environmental impact of cryptocurrency mining operations. A 18-month moratorium was placed on any new requests for electricity grid connections from only bitcoin mining companies. At the time, the province stated that 21 applications awaiting approval had been suspended. B.C.’s stated reason for suspending 21 applications pending approval was to assess how bitcoin mining impacts the province’s “environmental objectives”. B.C.’s 18-month suspension was imposed in order to assess how bitcoin mining affects the province’s “environmental goals”. Several localities are making miners feel less welcome. However, miners are starting to feel uncomfortable in some places. Pierre Poilievre, his conservative counterpart, had expressed strong support for Bitcoin. Trudeau quickly reacted by calling his rival’s views “irresponsible”, and cryptocurrency “volatile”. Trudeau has not tweeted about crypto, mining or bitcoin from his personal Twitter. Canada plays an important role in maintaining the hash rate online in the North American region. For the most part, Canadian miners are subject to harsher climates that their southern counterparts. Steve Barbour, CEO of Upstream Data, shared images on Twitter showing the devastating effects of Canadian weather on bitcoin mining operations. Frozen cables, large snow drifts and iced hardware are not ideal conditions for mining. However, some of the most prominent private and public mining companies are based in Canada. The list includes Bitfarms and SATO Technologies, Hut 8 as well as other publicly traded companies. Compass Mining, Bitfury and Upstream Data are just a few of the private companies that are based in Canada. Nearly all these brands are quasi-household names within the bitcoin economy, and often play key roles when educating and advocating for Bitcoin. Canada has a significant presence in the bitcoin market. While local hostility to bitcoin mining expansions is new in Canada, the sentiment is widespread in the wider industry. The entire industry unified to oppose a New York two-year moratorium on fossil-fuel-powered mining expansion projects. The bill was passed in late November 2022. Other left-leaning politicians cheered the move. Canada seems to be following their lead. Canada’s new attitude toward miners is also a copy of Kazakhstan, an international mining hotspot. After taking in a lot of mining activity from China, Kazakhstan began to propose power consumption limits for new mining activity in Oct 2021. The chatter was unsurprisingly negative and critical. Upstream Data’s Barbour wasn’t surprised, however. He took to Twitter to note that Quebec is “once more” censoring bitcoin miners. Why is it so surprising that grid connection restrictions are being proposed? Barbour says miners “compete against utilities.” He tweeted, “Expect increasing discrimination.” Despite changes in regulatory sentiment, some of Canada’s largest miners still plan on expanding. In a press release, Bitfarms stated that it “continues looking to expand its operations and add more jobs throughout the region” shortly after Hydro-Quebec’s proposal was announced. The press release, which quantified Bitfarm’s effect on the local economy, stated that Bitfarms had invested more than CAD$350 millions in Qu?bec since its inception. It currently employs over 100 people. “Canada’s ChoicePolitical support or hostility towards Bitcoin is ultimately of little importance for the network’s long-term success. However, short-term regulatory restrictions can make it very difficult for mining companies to process transactions and create new blocks. Canada’s regulatory opposition is unlikely to be as severe as China’s total ban in 2021. Multiple localities suspending all new requests to connect to the grid is disruptive, but it is unlikely that Canada will oppose China’s total ban. This guest post is by Zack Voell. These opinions are not necessarily those of Bitcoin Magazine or BTC Inc.


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