Mining crypto

Kahnawake will seek more energy for crypto mining

A company called Pow.re says it wouldn’t require the use of community funds.

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The Mohawk Council of Kahnawake (MCK) has authorized a new entity of its own creation, Kahnawake Blockchain Technologies, to request additional electricity from Hydro Quebec for the purpose of exploring crypto-mining opportunities.

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Crypto-mining refers to the process of using computers to “mine” new units of existing cryptocurrencies like Bitcoin, decentralized digital currencies based on a technology called blockchain. While MCK’s interest in crypto-mining, first revealed in the spring, is still described as preliminary, getting the extra power is a necessary step because the process is power-intensive.

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The idea was pitched to MCK by a company called Pow.re, which has experience in the industry, as a potential partnership that wouldn’t require the use of community funds.

“With zero investment and an opportunity here to create a new industry, or at least a new industry in Kahnawake, it’s exciting for revenue generation and for service development,” said MCK Chief Mike Delisle, who leads the economic development portfolio.

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“Now our revenue generation and business development team has a mandate to sit down and formally negotiate the terms of a potential deal with Pow.re,” he said.

“The financial risk to the community is very minimal,” said local Pow.re spokesman Paul Rice. “Pow.re is a well-funded and well-positioned company in the crypto industry.”

He said the company is keen to reach an agreement that would benefit Kahnawake while mitigating negative impacts and risks to the community.

There would be a fixed lease, for example, and Kahnawake would receive a percentage of the bitcoin mined. Mining rigs would likely be housed in shipping containers on land that has already been cleared, meaning minimal impact on soils and easy removal, Rice said.

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“What this allows for is essentially a free roll-up in the price of Bitcoin,” he said.

While cryptocurrency values ​​are known to be volatile and tokens become more difficult to mine over time, meaning the long-term viability of the project is unknown, Delisle doesn’t think this should prevent the community to explore this possibility.

“I won’t say it depends on the longer term approach because if anyone had a crystal ball we would all be billionaires and we would have been investing in crypto mining a long time ago,” he said. he declares.

However, some members of the community are concerned about the environmental impact of crypto-mining, which Delisle acknowledges.

“We share environmental concerns,” Delisle said. “The KEPO (Kahnawake Environment Protection Office) will be asked to get involved, obviously, and to conduct the kinds of studies and research that are needed and to participate in them in the future.” He added that some of the heat generated by a crypto-mining operation could be captured and used.

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According to Rice, the energy available from Hydro-Québec matches Pow.re’s vision of environmentally friendly crypto-mining; the company’s website emphasizes the use of renewable and “blocked” energy.

In addition to environmental concerns, there have been complaints that the Council seems to be acting too unilaterally on the economic plan.

“Now don’t get me wrong, I’m totally in favor of pursuing blockchain opportunities for the community,” said community member Jeremiah Johnson, who started investing in cryptocurrency during the pandemic. “But not without the prior informed consent of the community you are supposed to represent.”

He believes the MCK should be more conscientious about including the community in governance. “This is how we build trust between the Council and the community, working together,” he said, adding that he personally does not believe MCK should engage in commercial activities.

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The Council insists that the project is still in an exploratory phase, despite the intention to bid on a new power distribution. The extra energy does not commit Kahnawake to the project, according to Delisle, because the energy allowance is inherently valuable and could be used for other purposes.

Once more details are clarified and the impacts of a crypto-mining project are better understood, the community will be consulted, according to Delisle.

“We do this on behalf and for the benefit of the community,” Delisle said. “It’s not something we’re looking to do quickly and rushed and without any of these issues being determined.”

This story was funded by the Local Journalism Initiative.

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