This sprawling bitcoin mine operated by Hut 8 is located just outside Drumheller, Alta. (Dave Rae/CBC) The City of Medicine Hat has agreed to supply electricity and lease land to a Toronto-based cryptocurrency mining company in a deal that will see $100 million in construction spending in the southern Alberta city.

The city will provide electric energy capacity of about 42 megawatts to Hut 8 Mining Corp., which will construct bitcoin mining facilities near the city’s new Unit 16 power plant. The operation is expected to be running by September and will triple the company’s operating power to 60.7 megawatts, Hut 8 said.

“The signing of the electricity supply agreement and the land lease represents a key component in achieving our business plan for the roll-out of our BlockBox Data Centres in low-cost energy jurisdictions,” said the company’s board chairman, Bill Tai, in a release. Cheap electricity rates have miners digging for Bitcoin, not dino bones, in Drumheller “[Medicine Hat] offers stable, cost-competitive utility rates and has been very welcoming and supportive of Hut 8’s fast-paced growth plans.”

In bitcoin mining operations, rows upon rows of power-consuming computers are used to confirm crytopcurrency transactions. The verified transactions are then added to the public ledger known as the blockchain, and the miner is paid the digital currency in return for its services.

Hut 8’s existing 18.7-megawatt mining operation at Drumheller, Alta. — a gated compound filled with rows of shipping containers housing the computers — has so far mined 750 bitcoins. Bitcoin was trading Tuesday morning for about $11,180. Read more from cbc.ca…

thumbnail courtesy of www.cbc.ca