A Bitcoin Miner Is Buying Four Entire Power Plants

Victor Tangermann
·2 min read
16

Canuck Crypto

A company just bought four Canadian natural gas power plants to mine Bitcoin.

Hut 8, one of the largest digital asset mining companies in North America, made its "stalking horse bid," a binding offer to buy out an insolvent company, last month, but only declared the bid successful in a press release this week.

While the takeover is still conditional on the approval of the Ontario Superior Court of Justice, the news highlights the persistent appetite of miners to snatch up decommissioned powerplants to mine crypto, an immensely power-intensive and environmentally damaging process. Companies have been refurbishing coal-fired power plants to mine cryptocurrencies, despite plenty of local and environmental opposition.

Coal and Gas

The four natural gas power plants, which are spread out throughout the Canadian province of Ontario, generate a combined 310 megawatts, giving Hut 8 plenty of electricity to mine crypto with. The company already has mining facilities in Canada, New York, Nebraska, and Texas.

Despite its planned expansion, the company has fallen on tough times as of late. In the third quarter of this year, the company's net loss more than doubled compared to Q3 of last year, as Coindesk reports.

Other miners have fared better than Hut 8, benefiting from the rebounding value of Bitcoin, which had previously dropped to historic lows in 2022.

Earlier this year, Hut 8 had to shut down a Bitcoin mining site in North Bay, Ontario, due to a dispute with energy provider Validus Power. Ironically, the company is now looking to buy power plants from the same provider, including one in North Bay. Validus Power was forced into bankruptcy in September.

The use of natural gas and coal power plants to mine crypto has been met with plenty of opposition over the years, from noise complaints to environmental advocates highlighting the risks of groundwater contamination and pollution.

Earlier this year, a Pennsylvania crypto company was met with shock by local residents and environmentalists after announcing plans to burn tires to fuel its Bitcoin mining operation.

In short, the environmental cost of mining Bitcoin and other crypto is considerable, and Hut 8's latest acquisition — if it does end up being approved by lawmakers — will likely only add to the drama.

More on mining crypto: Crypto Mining Rig Discovered Under Floor of Courthouse, Stealing Power