The bitcoin boom reaches a Canadian ghost town

In 1971, an 11th grader named Greg Strebel wrote the introduction to a book about Ocean Falls, the tiny town in the British Columbian hinterlands where he lived. Strebel mentioned the odd fact that many of the town’s roads were made of wood, said the weather wasn’t as bad as some people made it out to be and noted that it had just gotten a new school building. But the one thing that mattered above all, according to Strebel, was the paper mill. “To most, ‘the mill’ imparts a sense of security by its presence,” he wrote. “A low throb of power is audible throughout most of the town as long as the mill runs, accompanied by voluminous exhalations of steam.”

The security provided by the mill turned out to be fleeting. It went silent when Strebel was in his 20s. Most of the buildings in Ocean Falls that haven’t been demolished over the decades are crumbling in place, and Strebel, along with most everyone who once lived there, is long gone. A population that peaked at 5,000 has fallen below 100. But this summer, the mill began to emit a new sound. It was more of a buzz than a throb, really, but plenty loud to be heard as far away as the ferry dock and the old firehouse. It was the noise of hundreds of tiny fans blowing air past hundreds of tiny computers, keeping them cool while they ran 24 hours a day, creating Bitcoins.

The Bitcoin mine has come to Ocean Falls after almost four decades of false starts. The town went dormant once the paper industry left, but it wasn’t dead, exactly. The dam that powered the mill was still capable of producing about 13 megawatts of electricity. Some of that went to power Ocean Falls and two nearby towns, Bella Bella and Shearwater. But even in the middle of winter, their residents used less than one-third of the electricity, leaving plenty to support new industrial uses. The dam wasn’t connected to the grid, a shortcoming that could also be an advantage in the right hands. Any power-hungry business willing to set up nearby would be well-positioned to negotiate a sweetheart deal.

For most industries, the remoteness of Ocean Falls offsets the benefits of cheap power. It’s about 300 miles up the coast from Vancouver, accessible only by boat or seaplane. Strebel’s teenage protestations aside, severe weather is a real issue. It’s one of the rainier places on the continent, and high winds in the long winter months can hinder travel. And so almost every plan-for casinos, breweries, marijuana-growing operations and water-bottling plants-came and went with little tangible impact. At one point, a group of businessmen sought to fill ocean tankers with water from the town and sell it to California or Saudi Arabia. The only substantial business for now is a salmon hatchery.

But several years ago, employees at Boralex, the private utility that owns the dam, began getting phone calls from Bitcoin miners, mysterious people untethered from the restraints of businesses producing actual physical goods. Bitcoin and other cryptocurrencies rely on a decentralized network of computers to confirm transactions, rewarding people who do the work with new coins in a process known as mining. In essence, mining was the pure conversion of electricity into money.

As the price of Bitcoin rose, mining migrated from PCs to data centers outfitted with specialized hardware, and gobbling through enough electricity to power whole towns. The biggest location for Bitcoin miners has been China, where coal-powered data centers cranked away in such places as Xinjiang, Inner Mongolia and Heilongjian. But the challenges of doing business in that country set off a global race for other suitable locales. The best locations had cool weather, stable governments and ample hydroelectricity, a form of power that lets miners avoid awkward questions about whether computational busywork justifies significant carbon emissions. Bitcoin mining rushes took hold in Scandinavian countries, as well as parts of Canada and the northern U.S.

Miners who inquired about Ocean Falls were mostly routed to Brent Case, Boralex’s operations manager for British Columbia. Case didn’t really know what Bitcoin was but he was always interested in a chat. Case is a self-described bush person who will happily regale listeners about what it’s like to live on a boat for a month stringing power lines through the Canadian wilderness, or that time a grizzly bear nearly scalped him alive. Case was also perhaps the most prominent resident still left in Ocean Falls. He soon realized the speculators blowing up his phone had no clue as to how to carry out what they were proposing. “A lot of the Bitcoin people, and blockchain people, and you name it, they think they can come in and do a project without doing their homework,” he says.

This wasn’t new to Case, who says there have always been “all kinds of concocted people coming through Ocean Falls.” But he was on the lookout for a savior for the town, so when he heard the seeds…

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