By Scott Roblin

City touting job creation, diversification with Hut 8 mining project

Mar 20, 2018 | 5:21 PM

MEDICINE HAT, AB – Over 100 new jobs are coming to Medicine Hat, as the City prepares for the arrival of a major employer in Hut 8 Mining Corp.

Announced on Monday, Hut 8 will be launching their second Bitcoin mining and blockchain operation in Alberta after opening a centre near Drumheller last summer.

Mayor Ted Clugston said they’re excited to partner with the cryptocurrency company, especially if it means expanding their reach in the digital technology sector.

“Medicine Hat, Alberta is in a new industry that could explode not just in the $500 billions, but in the trillions of dollars,” said Clugston. “And, we were here at the ground floor.”

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Hut 8 will be investing $100 million in the construction of a data mining centre near the Box Springs power plant, which will be comprised of 40 Sea-Can containers.

The centre will create 100 construction jobs and 42 permanent positions, which will include electricians, labourers, and both low-end and high-end technicians.

Interim CEO for Hut 8 Sean Clark said they’re going to be hiring both construction workers and full-time employees from the Medicine Hat area.

“The skill level of the jobs and the labour that’s required vary from manual up to electrical engineers,” said Clark. “We will provide training, and we will be looking to hire all that staff locally and provide the training.”

Employees will be monitoring specialized computers at the data centre, which are designed to crack algorithims around the clock.

Miners can earn digital currency in exchange for solving the problems, with Hut 8 using specialized chips produced by Bitfury.

According to Hut 8, Bitfury is one of only two companies that provide ASIC chips that allow for large-scale Bitcoin mining operations.

It’s an often volatile industry, but Clark said they’re not going to cut and run if Bitcoin’s value begins to drop.

“If the price of Bitcoin goes down, we gain market share because inefficient miners will leave the market and stop mining, and then we will therefore get a larger proportion of the block reward.”

Along with being ‘agnostic’ about the price of Bitcoin, Clark added they’re open to mining for other types of cryptocurrencies if they become more successful.

Due to high-end computer software needed for mining, the company will be utilizing significant amounts of electricity.

Hut 8 will be buying 42 megawatts of electricity from the City, which is five times greater than any other single organization in Medicine Hat.

In the case of a power outage or natural disaster, Clugston said the City can cut back that commitment.

“We will be able to supply our citizens,” he said. “And as you heard, they can scale back in about six seconds without any adverse effects to their servers. So, we have an agreement on that.”

Clugston confirmed that electricity rates will not be changing for the general public, adding they average out prices with other suppliers like Enmax and ATCO.

Planning to launch this fall, Clark believes they have the pieces in place to succeed off the bat.

“This site is already fully funded, so now we have the capital, the chips, and the electricity,” he said. “It’s all about execution, that’s what differentiates us.”

Hut 8 also has a cryptocurrency mining facility in Drumheller. As of March 16, 2018, Hut 8 has mined 750 bitcoins through that facility. One Bitcoin is currently valued at $11,103.00 Canadian.

The first 15 Sea-Can containers will be delivered to Hut 8 around June 22, while the remaining 25 are expected to be received in September.