Will Bitcoin fuels the next wave of Real Estate boom in Canada/USA?

Bitcoin mining consumes large quantities of energy because it uses computers to solve complex maths puzzles to validate transactions in the cryptocurrency, which are written to the blockchain, or digital ledger.
The first miner to solve the problem is rewarded in bitcoin and the transaction is added to the blockchain.

In 2018, we see that many large scale bitcoin mining company has setup pilot sites in North America to take advantage of the cheap electricity tariff as well as cool weather that will reduce the energy intake of the bitcoin mining machines. We see multiple industrial real estate has been snapped up by such mining corporations at Quebec, Washinton and Vancouver. The below are the large corporations snapping up such real estates for its mining facilities:

Vancouver, Canada: Hut 8 mining Group that was listed on Canadian Stock Exchange has partnered with Bitfury for its mining operation that consists of 22 datacenters that produce 24 MW of hashing power.

Washinton: The Washington state-based Giga Watt mining facility is among the largest in North America. This super mine exerts a ridicules 30 MW hashrate and incorporates just over 1,700 GPUs. However, news has reported that Gigawatt has filed for bankruptcy recently.

Georgia: Bitfury, one of the largest mining machine manufacturer in North America is running its mining operation here at George, USA.

Virginia Beach, Virginia: The $65 million Bcause mining facility was just announced in January 2018. Virginia Beach is not generally considered a crypto hotbed but after the local government slashed taxes for data centers, there was a good reason for mining firms to call this seaside community home.

As a super realtor who would want to understand this mining phenomenon and use it to help propel your real estate business, here are the few basics that you should know:

  1. What do mining corporation consider before purchasing a real estate to setup a mining operation in North America?
    a. Cheap electricity around USD0.03-0.05/KWH. The mining company in China are currently dominating the bitcoin mining market with over 80% of miners based in Sichuan, Xinjiang and Inner Mongolia. in China, the electricity cost is between RMB0.2-0.4/KWH. For large scale miners to move to your area, the electricity cost has to be USD0.03-0.05/KWHb. Stable electricity: Mining operation can’t afford downtime, hence the mining infrastructure has to be close to multiple stable power source, such as hydro, coal, or nuclear.c. Government policy: Many large scale mining machine provider such as Bitmain, Avalon and Ebang run super large scale mining operation in China. However, currently the mining operation is running at a gray zone in China, where local authorities have ordered the shut down of various large mining farm due to theft of electricity, lack of KYC and local government policy. It will be beneficial if your local authorities is supportive of such mining operationd. Tax Relief: Some states are encouraging investment into local economy thru tax relief, attractive land lease and or other benefits. Do check if your local authorities are able to assist you in securing such assistance.e. Industrial sites that are not away from the general population: bitcoin mining generates a lot of noise and heat pollution. A small operation of 50 miners could have generated a noise that is unbearable within a radius of 100 meters. It is important for the mining infrastructure to be far away from the general populationf. Security : there are ample cases of mining machines being stolen, or confiscated or robbed at gun points thru out the world, especially at times where bitcoin are costing USD20,000. In fact, some miners has moved their operation to Iran/Russia due to the low electricity tariff. However, many found that their mining machine are being taken away at gunpoint by local mafia or criminals.g. How about accommodation and amenities for the workers? The mining operation is like a datacentre, where a handful of workers are able to manage thousands of mining machines. For each mining sites, it would probably require less than 15 full time staffs. Hence, workers availability is not the top priority for a mining corporation. However, this would still likely generate more rental income for your real estate business.
  2. As the price of Bitcoin tanked from USD20,000 to USD3,200, where do we go from here?a. At Dec/January 2018, bitcoin is priced at USD20,000.b. As of now, December 2018, Bitcoin price is currently hovering at USD3200-3500. The break-even price for miners to continue mining bitcoin is estimated to be USD2000. There are currently still around 2.6 million units of Antminer S9 currently running daily at this USD3200 price point.c. We felt that bitcoin would most likely go up in the long term, and will continue to be profitable for miners who has access to cheap electricity in North America, especially at the state of Vancouver, Washinton and Quebec, where industrial tariff can be as low as USD0.05cents per KWH, relatively stable political landscape and good security.