Alberta is increasingly becoming the blockchain destination of the nation amid a recovery in bitcoin prices and strengthening cryptocurrency fundamentals. . Bitcoin prices. .Toronto-based Hut 8 (TSX:HUT) — which touts itself as one of North America’s largest publicly traded “digital asset mining pioneers” — said it is continuing remediation testing at its Drumheller site, its second in southern Alberta. The other is in Medicine Hat..In its monthly update, the company said it produced 131 bitcoin in March, or an average of 4.2 per day. Since February, it sold 240 bitcoin worth about $28,000 US each, and holds 9,133 in reserve. .After crashing last year and following a series of high profile scandals involving crypto CEOs, bitcoin is up about 70% so far this year. Hut 8 said the difficulty level for mining bitcoin increased by 10.67% month over month making it more difficult and expensive to mine new blocks and highlighting the growing demand and strength of the bitcoin network..According to the Wall Street Journal, the renewed interest is from investors who “see the digital currency as an alternative to the traditional banking system or who believe the Fed may slow its pace of interest rate increases.”.Computational problems increase in complexity as demand grows. In 2009 solving one problem consumed a few seconds of household electricity. Now it consumes about nine years' worth..Consequently, operating costs are on the way up. That’s because companies like Hut 8 rely on ever faster and more powerful computers to solve computational problems, which in turn use up more electricity. The business model of bitcoin miners has been to locate large computing centres in areas with surplus electrical capacity, predominantly in rural communities..Hut 8 operates 36,000 sq-ft of what geo-diverse data centre space and cloud capacity connected to electrical grids powered by significant renewables and predominantly emission-free sources, it said. . Blockchain mining .Hut 8 is attempting to create the first hybrid data centre model that serves both the traditional high performance compute (Web 2.0) and nascent digital asset computing sectors, blockchain gaming, and Web 3.0. It was the first Canadian digital asset miner to list on the Nasdaq Global Select Market..Meanwhile, Hut 8 is working towards closing a merger with US Bitcoin Corp. which is awaiting regulatory approval..“While we met key operational milestones in Medicine Hat in March, we continue to be laser-focused on two things," said Jaime Leverton, CEO of Hut 8. "The entire management team is committed to both remediating the challenges at our Drumheller site, and closing the transaction with USBTC, which remains on track.”.But the criticism is crypto-miners use too much power, which in turn makes it a carbon intensive industry. Governments in British Columbia, Manitoba and Quebec have imposed moratoria on new connections to their respective power grids to preserve capacity for "electric vehicles and heat pumps, and for businesses and industries that are undertaking electrification projects that reduce carbon emissions and generate jobs and economic opportunities," according to Josie Osborne, British Columbia's minister of Energy, Mines and Low Carbon Innovation who brought in the ban last December..Hut 8 itself closed a facility in North Bay, ON following a dispute with local authorities over a power purchase agreement, hence its relocation to Drumheller. .That hasn’t stopped investment houses such as Calgary-based Stifel from initiating coverage on new firms. On Wednesday it recommended TSX-listed Bitfarms (TSX:BITF) as a “speculative buy” with a target price of $2 US, up from 94 cents presently..In its analysis of bitcoin economics, Stifel noted Bitfarms owns its own electrical company and the majority of its power consumption comes from renewables. “Power consumption costs for miners are the single largest expense line and a key factor in determining mining profitability,” it said. .Stifel further noted despite its inherent volatility, crypto prices have continued to rise since 2011 when they were worth about 10 cents.
