Hut 8 Mining (TSXV:HUT), a cryptocurrency mining and blockchain infrastructure company established through an exclusive arrangement with the world’s leading full-service blockchain technology company, the Bitfury Group, announced that construction is fully-underway and rapidly advancing at its newest cryptocurrency mining facility (Medicine Hat Facility) near the City of Medicine Hat’s Unit 16 power plant. The Medicine Hat Facility is being developed further to the previously announced definitive agreements entered into between Hut 8 and the City of Medicine Hat (CMH) for the supply by CMH of 42 MW of electric energy and a long-term land lease.
Together with the Company’s existing 18.7 MW operating facility in Drumheller, Alberta, Hut 8 will have an aggregate power capacity of approximately 60.7 MW by September 2018 to service a total of 57 fully-funded BlockBox Data Centers.
“We are following through on our promise to shareholders to deliver site construction and electrification on time and within budget,” said Andrew Kiguel, President and Chief Executive Officer of Hut 8. “Through our exclusive arrangement with Bitfury, we have access to the equipment, chips and experience necessary to mine Bitcoin on an industrial scale and to rapidly expand our market share.”
Significance of Processing Power
Cryptocurrency mining is a process by which “network nodes” (i.e. cryptocurrency miners) use computing power to solve complex cryptographic problems in order to validate new “blocks” (essentially a collection of transactions) which are appended to the blockchain. Generally speaking, miners with access to higher processing power are able to solve more problems and obtain more cryptocurrency.
The development of the Medicine Hat Facility will increase Hut 8’s processing power (through the addition of 40 BlockBox Data Centers) and more than triple the Company’s current power capacity (from 18.7 MW to 60.7 MW). These factors are expected to contribute to an increase in the number of cryptocurrency which are successfully mined by Hut 8.
Since commencing operations in December 2017, Hut 8 has mined more than 1,200 Bitcoin through 17 BlockBox Data Centers and 18.7 MW of power capacity.
Hut 8 commenced site construction at the Medicine Hat Facility on March 10, 2018. Construction of the interconnection facility, which will supply power from CMH’s Unit 16 power plant and the adjoining power substation, is underway. The underground conduit for cables and fiber optics lines is nearly 90% complete and fencing is nearly 60% complete. Cable pulling is readied for commencement (on a staged basis). Screw piles are also nearing completion, with more than 550 such screw piles designated as foundations for the BlockBox Data Centers, transformers, switch gear and other related infrastructure. Hut 8 has completed the installation on site of two BlockBox Data Centers, ten transformers and three switch boxes. Final grading and placement of finishing material on an access road and parking lot area is nearing completion in preparation for the scheduled delivery in mid-May 2018 of Hut 8’s pre-fabricated site buildings, including the control center, administration facilities, an electronics shop and certain other IT infrastructure.
The BlockBox Data Centers are scheduled to be shipped and site installed on a weekly basis over the next few months, with staged server installation to commence in mid-May 2018. Electrification of the Medicine Hat Facility is targeted for June 1, 2018, with 16 BlockBox Data Centers on track to become operational by June 2018. The remaining 24 BlockBox Data Centers are expected to become fully-operational by Q3 2018. Construction activity, which is expected to peak at about 100 personnel on site, is on track to be completed by Q3 2018.
Hut 8 and the City of Medicine Hat
Hut 8’s collaboration with CMH on electricity supply (including the interconnection facility) and the land lease continues to serve as a strong economic stimulator for the region, including through the aforementioned construction activities by Hut 8, which will be approximately C$100 million (all fully-funded) and the post-construction operation of the Medicine Hat Facility, which is expected to attract a total of 42 direct roles, 20 of which have been filled to date. Training has been arranged for such on-boarded staff, which will take place at the Drumheller Facility.