Pierre Poilievre promises to “unleash” the potential of cryptocurrency once he becomes Canada’s prime minister. First he needs to be the leader of the federal Conservative Party, but let’s not quibble over the fine print.
YES, crypto!
Earlier this month, in Miami, blockchain believers gathered en masse — a conference — with a speaker line-up that included El Salvador’s president Nayib Bukele (crypto became legal tender in his country last year). Bitcoin 2022 heard from Paypal co-founder & billionaire Peter Thiel (who claims his “biggest mistake” in the last decade was “getting too late and too little into bitcoin”). There’s also Canadian content with psychologist Jordan Peterson. The emeritus U of Toronto professor says blockchain coinage is the “most disruptive technology against inflation.”
China’s Communist Party isn’t keen on bitcoin entrepreneurs. They slammed the door on crypto-currency mining in 2021—ostensibly to keep a lid on scammers and swindlers but more likely to clear the pathway for their own digital yuan currency.
Prospecting for bit-coinage requires untold numbers of computers, chugging away 24/7, all the while powered with a reliable source of electricity. You can’t do it on the cheap in places like Ontario because power costs are crazy expensive.
Alberta’s deregulated electricity market, meantime, has generators that can affordably deliver the massive megawatts required to keep bit-miners humming along for years to come.
Like all bonanzas, the opportunity to make a buck attracts both well-intended start-ups and scoundrels. Last summer, Nevada-based Black Rock Petroleum Company whipped heads with their announcement of a deal to relocate as many as one million bitcoin mining machines from China to southern Alberta; their ambitious plan required power from three natural gas plants. Despite the hype, the project didn’t materialize.
Vancouver-based Link Global took a different approach, and ran into a different wall. A regulatory kerfuffle ensued with the Alberta Utilities Commission (AUC) because the bitcoin miner intended to generate electricity with natural gas from dormant wells; the necessary permissions had not been negotiated up front. After much ping-ponging, including the AUC’s threat of a $7.1-million penalty, a settlement was reached and the regulatory pathway made clearer for bitcoin miners looking West to seek a fortune. There is also constructive chatter about how best to update Alberta’s electricity grid transmission policies to assure better use of stranded natural gas and renewable power plants to accommodate “behind the fence” power production, of interest to crypto-miners.
The word is out on Alberta. And it’s familiar in tone.
A century ago, the Canadian Pacific Railway lured thousands of settlers to The Last Best West with the promise of a property bonanza. Today it’s cheap electricity. With its abundant natural gas resources, the southern Alberta city of Medicine Hat hosts one of the largest bitcoin operations in the country — Hut 8 Cryptocurrency.
Alberta Finance Minister Travis Toews recently launched a new bill— the Financial Innovation Act —to create a regulatory sandbox for financial services and fintech companies. The proposed new rules offer approved businesses temporary relief from certain legislative and regulatory requirements, a so-called “sandbox” to play with new ideas in digital commerce.
“The world of finance is rapidly evolving,” Toews stated in his press release, “and our government understands we need to partner with businesses if Alberta is going to stay ahead of the curve,” adding that the bill, if passed, opens the door wide to blockchain for financial transactions.
What’s missing from the minister’s missive is public conversation about the coherence of energy security, net-zero carbon ambitions, and crypto-farms that burn through power like there’s no tomorrow. There’s intriguing talk of the potential for bitcoin mining to help fund green power (converting stranded renewable energy to bitcoin, that can then be sold over the internet) but the concepts have yet to be proven.
As for the known-knowns about crypto-mines: Elon Musk has been thinking about consumption.
For a short spell, last year, you could purchase a Tesla with bitcoin. After a few months, Musk had a change of mind, tweeting his concern that the carbon footprint to generate power to make the cryptocurrency to buy one of his cars was out of whack. Money is still king at Tesla. The entrepreneur engineer, nevertheless, is keen on blockchain money. Tesla, the corporation, holds nearly US $2 billion in its portfolio.
This column is the consensus opinion of the writers Donna Kennedy-Glans & Don Hill. If you haven’t already, please subscribe to BEYOND POLARITY — scroll down on your phone or tablet, or look to the right in the panel beside this post. Enter your email to FOLLOW, a wheel spins, hamsters get fed.
Okay, I am a Luddite. There, I have publicly confessed.
Now, some thoughts on crypto. As I understand things (as a Luddite, I probably do not understand!) one of the principal arguments in favor of cryptocurrency is that the various national currencies are fiat currencies and have no tie to actual value. I do understand that much; perhaps nothing else but I got that. So to speak.
So, how is crypto better you ask? [Well, I ask.] The value of crypto is based on what the market is willing to pay for it we are told. Okay, but isn’t that pretty much what a fiat currency is, such as CAD, USD, pound, Euro, etc.? The various national currencies are clearly fiat currencies and are absolutely subject to inflation as the various national governments simply print more of the particular fiat currency. On the other hand, you can create more crypto by “mining” it, creating it out of electricity and electrons in your computer, can you not? So, what is the difference between crypto and fiat currency other than fiat currency has a government (kind of) standing behind it’s own version of fiat currency and crypto has only the ever changing marketplace? Oh, and fiat currencies also are subject to the marketplace – its called foreign exchange markets.
Okay, I am a Luddite and I really don’t understand.