By Matt Pouncy

Hut 8 ready to make its mark in Medicine Hat

Sep 21, 2018 | 5:36 PM

MEDIICNE HAT, AB — Cryptocurrency isn’t something that we can physically hold, but it’s going to have a big impact in Medicine Hat.

Hut 8 CEO Andrew Kiguel and Mayor Ted Clugston cut the ribbon on the company’s bitcoin mining facility.

Originally announced in March, the company has been fully operational since July which was two months earlier than anticipated.

The Medicine Hat location is now Canada’s largest cryptocurrency farm.

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Hut 8 has 56 portable containers with servers mining for digital currency.

Kiguel says they currently use 67 megawatts of electricity which Medicine Hat is able to support.

“The reason we came here is, we were able to lock down a 10 year contract with the city, to basically have that turbine there dedicated to our cryptocurrency mining,” said Kiguel.

Medicine Hat produces around 250 mega watts of energy.

The city has an agreement with the mining company where if more power is needed, Hut 8 will power down their servers.

Clugston says it hasn’t been an issue so far.

“We’ve just survived one of the hottest summers, you know 41 degree Celsius summers, and the air conditioners still came on,” said Clugston. “Of course the servers were on as well. So, it’s just been a great partnership between the city, and Hut 8 from day one.”

Clugston added the two groups are working together, but a partnership isn’t the best word to describe their relationship.

“We are the provider of electricity, and they are a customer. No different than the methanol plant over there, or the fertilizer plant,” said Clugston. “We produce it and they use it.”

The project hasn’t be free of concerns.

With the currency being available online, it carries a risk of being hacked.

Kiguel says they store their bit coin at a secure facility.

“We deal with a custodian that keeps, called Xapo, that keeps our inventory off the internet, and hidden in an armed underground bunker,” said Kiguel. “We feel very secure, it’s the Fort Knox of bit coin custodialship, and we feel pretty good that its in safe hands.”

Kiguel says bit coin is a billion dollar industry but there’s a finite amount available.

17 out of a possible 21 million have been mined already, but Kiguel says it will be over 100 years before it’s all gone.

“The algorithm blocks every 10 minutes and increases the difficulty if they’re being solved too quickly,” said Kiguel. “And so doing the math, it’s got till around 2140 or so before we hit the $21 million mark.”

There are other types of cryptocurrencies out there, but Hut 8 is committed to sticking with bitcoin and the City of Medicine Hat.