By Charles Lefebvre

Bitcoin mining operation on pace to begin in June

May 28, 2018 | 4:31 PM

MEDICINE HAT, AB — A cryptocurrency company setting up shop in Medicine Hat could begin operations by next month.

Crews can be seen working on the Hut 8 Mining Corp. site, located next to the city’s Unit 16 power plant. Hut 8 announced a 10 year, $100 million agreement with Medicine Hat to build and operate a bitcoin mining operation in the city.

“The project is progressing extremely well, so far, on time and on budget,” said Andrew Kiguel, president and CEO of Hut 8 Mining Corporation, over the phone from Toronto on Monday.

According to the company’s first quarter report, 16 Blockbox Data Centres, large containers filled with bitcoin mining software, are being delivered to the site. Once the units are installed, the plan is to connect them to electricity, allowing them to begin mining for bitcoin, which involves computers confirming bitcoin transactions by solving cryptographic equations.

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“From delivery to being able to plug them in, it’s probably a 24 to 48 hour period, where, again, we just want to make sure what’s been delivered to us has been assembled properly, looks right, and then we plug it in and we start mining right away,” said Kiguel.

Hut 8 currently mines for Bitcoin in Drumheller, using 17 Blockbox Data Centres, which have helped the company mine 828 Bitcoin so far this year, according to its first-quarter report.

Medicine Hat will have a total of 40 containers on site when it is fully operational in September.

Kiguel adds they want to ensure the equipment is running smoothly before they begin full operation in Medicine Hat this fall.

“The key for us is choosing operational excellence, as opposed to just rushing everything in there very quickly,” said Kiguel. “But, we fell that the timeline of having all 40 boxes up and running by September is very achievable, and that, again, will be staged through June, July and August.”

Hut 8 will be using 42 megawatts of city power for its mining operation.

In the first quarter on 2018, Hut 8 reported revenues of $10,988,949, with a gross profit of $8,823,650. The report can be viewed here.