China moves to shutter bitcoin mines

The insatiable demand for digital currencies such as bitcoin and the huge computer power needed to mine these currencies has led some local authorities to complain of excessive electricity consumption amid concerns that their electrical infrastructure is unable to cope.

As the cryptocurrency-ecosystem is growing in popularity and numbers, more miners are entering the scene and with that more pressure is put on the electrical infrastructure - particularly in Douglas County, small territory in Washington State - [CNBC reporting].

Hydro-Quebec-one of the largest utility companies in the country with a total output capacity of 36,912 megawatts-says that it has a surplus of 100 terawatt-hours in ten years. It's in "very advanced" talks with more than 30 cryptocurrency miners - many of them now operating in China - and expects to announce agreements in 2018, Marc-Antoine Pouliot, a spokesperson, said on Wednesday in a phone interview. That's more than half of the 38 terawatt-hours of power used each year by the world's biggest traditional mining company, BHP Billiton. Even though it plays host to the world's biggest community of bitcoin miners, they only used 0.2 percent of the country's annual electricity production, according to the report. Chinese officials have reportedly asked local governments to guide miners toward an "orderly" exit from the business, and ViaBTC has moved operations to Iceland and America as a result. It's hard to predict how much power will be used to mine bitcoin in the future, Lu wrote, as it depends on how efficient the computers running the complex calculations needed for mining become and how many additional computers will be used in the process. Miners earn bitcoin-denominated rewards for performing the complex calculations needed to confirm transactions in the cryptocurrency. A December 2017 study by the electrical supply company Crescent Electric (CESCO), named Louisiana as the cheapest U.S. state for cryptocurrency mining - a low 9.87 cents per watt makes the cost of mining one Bitcoin about $3,224. Breakevens are achievable at $3,869 at those power prices, Lu said. The computers used in mining aren't expected to last more than two years and the other equipment involved is relatively cheap.