If your idea of a modern miner is a guy with a lamp-helmet and pickaxe, you may be a techie dinosaur – as I was mere days ago.
That was before I learned about a technology that might be as revolutionary as the Internet itself.
It’s called hyperledger blockchain technology, and many believe it’s about to do for business what the Internet did for communication.
The blockchain was originally devised for the crypto currency, Bitcoin. The digital currency was created in 2009 in the wake of the financial collapse that wiped out banks and investment companies, taking savings, pension funds and jobs with them.
Bitcoin is an asset, like a stock share, and its value fluctuates. At press time, one Bitcoin was worth about $11,500 CDN.
Bitcoin can be “mined.” But it’s done with powerful computers, not a pick and shovel. And to to comprehend Bitcoin mining you have to understand the blockchain.
Basically, here’s how it works.
All of the information pertaining to Bitcoin transactions worldwide is uploaded to a “block.” Bitcoin miners validate the information in each block by using computer power to solve complicated mathematical algorithms.
Once the solutions are provided by the miners, the block is closed, and a new block, connected to the last one, is opened. A new block is created every ten minutes. Hence, the blockchain forms a digitized, decentralized public and secure ledger of Bitcoin transactions. Each “node” – a computer connected to the network – receives a copy of the blockchain. The miners are paid in Bitcoin.
The system is immutable and impossible to hack.
To me, there are really two stories here.
The first involves a company called BitCity Group. In March, BitCity announced it was opening a Bitcoin mining operation in Sarnia, leasing space on the TransAlta River Road site.
Why here, and why TransAlta?
Crypto-currency mining is big business and involves large numbers of linked-up computers devouring massive amounts of electricity. TransAlta runs a natural gas-powered electricity plant and supplies steam and electricity to local industries. More importantly, it sells electricity at a discounted rate to adjacent energy park tenants.
Like BitCity Group.
By the way, if you’re wondering whether mining is rewarding, consider this. Days after making its Sarnia announcement, BitCity Group was acquired by another company, CryptoGlobal. In early April, CryptoGlobal was in turn bought by a larger outfit, HyperBlock.
When you see industry consolidations occur at such a pace you know piles of money are at stake.
How much BitCity expects to earn from the Sarnia operations isn’t known, but its power consumption will be significant. TransAlta’s Jim Fenton, the man responsible for developing the company’s Bluewater Energy Park, said it could equal that used by any of the area’s major refineries.
BitCity CEO Brandon Keks said his Group looked at utility companies “all over North America” before selecting Sarnia and TransAlta, with which he describes his new business partnership as “a breath of fresh air.”
Keks expects the operation to begin mining onsite between September and November.
But the bigger story here is the growing importance of the blockchain itself. The technology is here to stay, with enormous consequences for business. It makes it possible to digitize, code and insert ANY document into the blockchain ledger.
The ramifications for health care, banking, law and corporate contracts – you name it – are immense. Blockchain technology permits the creation of indelible records across multiple commercial fields – a record that cannot be changed, hacked, tampered with or destroyed.
The potential applications are as exciting as they are limitless.