Where Does the Bit-Craze Stand and What Should Data Center Providers Know?
by Josh Anderson
MONTRÉAL, QUÉBEC – Regardless of your feelings on Blockchain, it’s difficult to ignore the impact that it is having on the tech world. And when you zoom into a particular market, such as Québec, it’s not hard to see why Blockchain-based applications are taking over all of the conversations in the data center space.
However, many insiders in the industry, even in Québec, still have a lot to learn about this revolutionary technology. And that’s why Tyler McKaig-Campbell, Founder of Hodlers Canada offered up some salient “Blockchain 101” at CapRE’s Canadian Digital Transformation & Green Energy Innovation Summit, beginning with an overview of the Bit-craze.
“The last 12 months have been crazy. Especially last December or January, the race was crazy,” he recalled. “Because these servers, these machines which maybe cost a couple of thousand dollars, were producing upward of $100 a day at one point. So they were as close to money trees as you could find. There was a huge rush to get into mining. Specifically here in Québec, data centers and hydro-companies were impacted. I’m not close with Hydro-Québec for example, but they created an incentive program last year for data centers for cheap electricity,” he shared.
“In terms of Bitcoin mining specifically, things that are important to traditional data centers are important to miners,” continued McKaig-Campbell, segueing to, more specifically, the data center side of things. “Right now it’s a race for the cheapest electricity. And that’s all there is to it. Québec has some very beneficial features in terms of its climate. And it’s all air cooled, the people that are doing it at scale, as well as the ability to access cheap hydro. In terms of relevance to this industry, it’s all about the race to cheap electricity.”
“How are the big players doing that?” he asked the room. “A lot of it is negotiations with local governments. There are different projects that are using update dams and hydro-electric power, and reviving them, and having an incentive program with local governments. Out west, there are some mills that are being resurrected to access their power grid. And in terms of the traditional data centers, for security in the traditional sense of how we all picture a data center, those things just aren’t as important as cheap power.”
“So that is kind of where the industry is going. And if you’re involved in the mining industry, you’ll see that’s what everyone is looking for,” he mused, preparing to wrap up his remarks. “You can find 4 cents per kilowatt hours. A lot of people are being very profitable. The flip side to that is that the network is decentralized. As an industry we want more and more people to be able to do this mining and keep the network decentralized, to avoid centralized power. This is the kind of application to Blockchain that is kind of next-generation.”
“YouTube was down yesterday, does anyone know why? Think about the Arab Spring in Egypt,” suggested McKaig-Campbell. “The government cut off access to the internet, so people couldn’t form groups. In Hong Kong the same thing happened. In Turkey last year, the government cut off access to Wikipedia. So these are the threats that blockchain and decentralization hopes to solve. In terms of monetary things such as the currency, you can see problems in countries like Zimbabwe and Argentina who are having massive inflationary problems. because the government is in control of monetary policy. So what does Blockchain do? It takes the power away from any central government. And it’s the same with Google and YouTube.”
For more coverage of this panel, check out earlier CapRE Insider Reports:
- Laurent Féral-Pierssens Talks Three Pillars of Blockchain at Canadian Digital Transformation Summit
- The Three Pillars of Blockchain: Creating Systems Upon Systems
- Blockchain 101: What Does “Distributed” Mean Exactly?