Crypto-Currency Mining: The Wild, Wild West of Data Centers

Jan 30, 2018
by Josh Anderson

MONTRÉAL, QUÉBEC — At our recent Second Annual Greater Montréal & Québec Data Centre Summit, CapRE welcomed a panel of leading regional crypto-currency experts talk about the arena’s explosive growth in recent months. In light of its status as a rising asset class, Moderator Ed Kimm, Vice-President for Cloud Solutions & Strategic Alliances at StrataCore asked the panel what they’re seeing on the ground in terms of demand.

First, Marc Creel, Director at COLO-D said that it comes down to power. “The people that come to see me want ridiculous amounts of power,” he offered. “They’re coming and they say they want 20 megawatts today and they want to go to 200 megawatts. And that’s the Hydro-Quebec entire feed for some areas!”

Creel then offered a succinct metaphor for the dynamic. “They’re coming in looking for basic transportation – they need an engine, brakes and a steering wheel. But they’re coming to my data center, which is basically a Mercedes dealership, and they’re looking for none of the things that I provide,” he explained. “They don’t need redundant cooling. They don’t need redundant power. They don’t need…UPS, PDUs or large or redundant connectivity. They’re just looking for space and power. And they’re looking for very large power. And there are only very few places in the Province where you can walk in one day and say, hey I need 20 megawatts. I’ve got a 25 kb hydro utility entrance into my building, and if I were to give these miners what they want, my data center would be full in one week.”

Francis Pouliot, Co-Founder of Research and Cryptoassets, Catallaxy

Next, Francis Pouliot, Co-Founder of Research and Cryptoassets, Catallaxy said that he has seen absolutely the same thing. “I’ve been consulting for miners for quite some time. In the beginning, it was more about working w manufacturing firms, but today, I feel like my job is…more like the Wild, Wild West and I’m some kind of prospector,” he revealed. “Because all of the data centers that are marketed are either full or are just too high quality for what miners need. It’s too expensive…you really don’t need that much.”

Pouliot said that it’s common to spend days knocking on the doors of factories, paper mills, etc. trying to convince them to put some power in there, or even put some mining in them. “Something I see as being transformative is, I really think they’re going to stop building locations and start to collocate with other locations that require some heat during the winter,” he predicted. “I think this is the killer app of Quebec and other northern countries – the ability to recycle the residual waste of the mining operations, which in our case is heat of course. Electricity comes in and bit coin and heat come out.”

Pouliot also sees further innovation on the horizon, however. “Miners are very creative,” he remarked. “I can expect that when marijuana is legalized and the rules make it so that we need to cultivate it in Canada, for it to be sold in Canada, we’re going to have to go at it in the winter – everywhere. All of these greenhouses are going to pop up and miners are going to try to latch onto that power. It’s the wild west!”

Stay tuned to future CapRE Insider Reports for more from this panel. See previous Insider Reports covering this panel discussion below:

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