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'Up to 1 million' bitcoin processors could be relocated to Alberta from China under energy firm's proposal – CBC.ca

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Three natural gas-producing sites in southern Alberta could host “up to one million” bitcoin mining machines relocated from China under a deal proposed by Nevada-based Black Rock Petroleum Company amid Beijing’s ongoing crackdown on cryptocurrency production and trading.

Bitcoin is a digital currency that can be sent between users without the need for a central bank, leveraging blockchain technology to maintain a decentralized ledger of transactions. Bitcoin’s value has spiked in the last year. 

The process of unlocking new bitcoin to add to the existing supply is calling “mining.” This requires the use of computers with powerful processors in an energy intensive process. 

No timeline for the deal was immediately announced, though the contract term for using the natural gas sites is listed as 24 months, according to a press release from Black Rock Petroleum Company.

Earlier this year, Chinese authorities cracked down on bitcoin mining due to apparent environmental concerns and other issues, ordering miners to shut down.

Up to one million mining machines, or rigs, entering Alberta would represent a significant chunk of China’s prior total mining capacity, experts say, with major impacts in energy consumption in the province. 

A crypto mining farm operates in a former Soviet-era car factory warehouse in Moscow in 2018. (Maxim Zmeyev/AFP/Getty Images)

Alex de Vries, a researcher and economist who runs the cryptocurrency analytics website Digiconomist, said the move to Alberta would represent a multi-billion dollar investment using fossil fuels as a power source.

“In China, they were using hydroelectric power for at least part of the year, and then the rest of the year they would be using Chinese coal, instead,” he said of the energy source powering the computers used in the mining process.

“But if they’re coming to Alberta and start running on natural gas all year round, it’s not improving the situation of this network, which is already responsible for more CO2 emissions than we are saving with all electric vehicles around the world combined.”

As of Aug. 9, a single bitcoin was worth more than $46,000 US and the total market supply was worth more than $866 billion US, according to the price tracking website CoinMarketCap.

Proposal represents 1/3 of global mining capacity: expert 

It’s difficult to definitively determine how many computers make up the global bitcoin mining network; de Vries pegs that number at around three million.

In other words, the one million machines supposedly destined for Alberta could represent around a third of global mining capacity. 

Though he’s skeptical of the “astronomical” figures proposed in Alberta, Brandon Arvanaghi, a U.S.-based bitcoin mining engineer who is not connected with the Alberta project, said the full impact of China’s crackdown is not yet fully understood.

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“Basically, every North American miner has started ramping up every facet of their mining operation. They’ve raised more money, they’ve procured more power, they’ve gotten more land, and they’re ready to scale up,” Arvanaghi said.

“As these new miners come in [to North America], you see more jobs coming in, IT staff, electricians, campus managers.”

Bitcoin processors can connect to the electricity grid or directly to an energy producer, such as a natural gas plant, to power their computer network. 

While bitcoin miners tend to gravitate toward the cheapest sources of electricity, Arvanaghi said there are benefits to natural gas producers, too. Certain bitcoin mining companies utilize flare gas from oil drilling, saving it from being burned.

Black Rock Petroleum Company, not to be confused with BlackRock, the giant New York-based investment firm, said in a release that the first 200,000 mining units would be hosted at the Quirk Creek gas plant, located near the southwestern hamlet of Millarville, Alta.

For a mining unit, picture a powerful computer with cooling fans. Each individual unit might not look too different from your home desktop PC processor — but the guts of this hardware are specifically designed to handle intensive and heavy-duty computing work.

Bitcoin processors solve complex mathematical problems to enable bitcoin transactions, and miners earn bitcoin for doing so. (Bahador Zabihiyan/Radio-Canada)

It’s unclear what the project could mean for Alberta’s tax base. Black Rock said the site would be staffed by Chinese and English speaking technicians and other employees, but it’s unclear how many jobs the project would entail.

The logistics of bringing such a large number of mining rigs to rural Alberta would be challenging, Arvanaghi said.

“To facilitate that, you need a lot of land, you’ll probably need a substation, you’ll need internet connectivity out there, a lot of staff who know how to operate these miners … basically, there’s a lot of things that can go wrong with this.”

The Quirk Creek plant is operated by Calgary-based Caledonian Midstream Corporation, which was acquired by Black Rock in early July. 

Charles Selby, president of Caledonian, said in an email that the company had entered into a non-binding letter of intent with Black Rock, which is subject to financing and other conditions.

Significant hurdles to clear

At this stage, Quirk Creek may not be equipped to handle the demands such a significant number of bitcoin processors would require.

“Given our current gas production, a more reasonable number of miners would be 10,000 rather than the 200,000 referenced in the press release,” Selby said.

In a brief phone call, Black Rock chief executive officer Zoltan Nagy said additional energy generation to meet the company’s needs would be achieved by adding generators to the site.

Nagy said additional details surrounding the financials of the deal would be forthcoming. Conducting a full interview at this time was premature, he said.  

An illustration showing a representation of the virtual currency in front of China’s flag. China has cracked down on bitcoin mining in recent months. (Dado Ruvic/Reuters)

He said his company had been pursuing the purchase of Caledonian before the opportunity to relocate the Chinese bitcoin units arose. 

The top end of Black Rock’s projections — one million mining machines — would suck up a gigantic amount of power in Alberta.

De Vries, the founder of Digiconomist, said depending on the exact equipment type, those machines would need between one gigawatt (GW) to 3.5 GW of power — which, by de Vries’s calculations, would take up roughly 10 to 30 per cent of the total natural gas-based electricity production in Alberta.

“What they would need would represent such an enormous part of the power available in Alberta,” de Vries said, adding that such projections make him skeptical of the plan as stated.

Black Rock Petroleum Company’s website features two profiles — that of Philip Andrews, president of the subsidiary company Torrance Petroleum, and of Zoltan Nagy, the company’s president, controlling executive officer, treasurer, secretary and director. Both profiles are illustrated, for the time being, with stock photographs. (Black Rock Petroleum Company)

Power plants in Alberta cannot be constructed or operated without approval from the Alberta Utilities Commission (AUC), and the province has other rules governing the production of electric energy.

The Quirk Creek plant would almost certainly need approval from the AUC to host the bitcoin machines.

Nagy said Black Rock hasn’t reached out to provincial representatives but said the company was looking into it.

Questions around finances

Far more than a few computer towers in an office building, the sheer size of bitcoin mining facilities can be surprising. For example, in 2018, at the grand opening of Hut 8, a bitcoin mine in Medicine Hat, Alta., the facility started with 56 shipping containers each filled with 180 computer servers, operating around the clock.

Hut 8, which operates a bitcoin mine in Medicine Hat, Alta., says it is currently the biggest player from a bitcoin mining perspective in Canada, with 109 megawatts of installed power. (Kyle Bakx/CBC)

Black Rock Petroleum’s filings with the U.S. Securities and Exchange Commission are limited, so its financial status is difficult to ascertain.

Alfred Lehar, an associate professor studying finance at the Haskayne School of Business at the University of Calgary, said it’s hard to know definitively whether there is enough financial backing to make this deal happen.

“It’s certainly a very junior company that does not have a lot of assets compared to big energy companies that we are used to here,” Lehar said.

Armed guards

Under the terms of the Quirk Creek agreement, Black Rock’s press release said, Black Rock would work in partnership with China-based Optimum Mining Host Ltd. (OMH), which would cover many of the costs anticipated to arise out of the arrangement.

Josh Goodbody is chief operating officer of Qredo, another cryptocurrency firm and a mining expert who used to work in China who has no connection to the Alberta project. He said consortiums of miners moving into North America have become increasingly common after China’s crackdown.

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“Domestic miners [have] to internationalize themselves, set up an offshore or global presence, and do that in a place like North America,” Goodbody said. “And [then], bring all of their hardware along with them.”

According to Black Rock Petroleum, OMH would be responsible for providing 24/7 armed security guards at the site “with enforcement power.”

Concerns over environmental impacts

Even if Black Rock Petroleum’s proposal does not live up to its billing, the act of pairing natural gas and bitcoin mining is no new phenomenon.

Saeed Kaddoura, an analyst with the environmental think-tank Pembina Institute, called bitcoin mining a “parasitic process” — one that he characterized as being “energy gluttonous [while chasing] the cheapest electricity around the world.”

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“We should be looking at the underlying technology of blockchain, and how can we utilize that to develop [the] technological sector in Alberta that supports the oil and gas industry,” he said.

“But bitcoin mining in itself, I don’t think that’s something we should be attracting without any oversight.”

As a way to store data securely, the blockchain is a decentralized ledger shared across multiple computer systems that publicly shares all transactions. Bitcoin uses the blockchain. 

CBC News reached out to Alberta Environment and Parks to inquire about environmental considerations when it comes to bitcoin mining in the province, but did not receive a response by press time.

On Monday, the UN climate panel sounded a dire warning, cautioning “irreversible” climate impacts and warning that humans were dangerously close to runaway warming. 

De Vries of Digiconomist said that report raised warning flags for bitcoin mining projects around the globe.

“Even if these miners are not going to be in Alberta, they will probably end up in different locations, where they will probably run on fossil fuels regardless,” he said.

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Stock market news live updates: Stock futures sink amid China's Evergrande default risk, debt ceiling debates – Yahoo Canada Finance

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U.S. stock futures sold off Monday morning, tracking declines in overseas equities as investors nervously eyed the potential ripple effects of the default of a major Chinese real estate company and ongoing debates over the debt limit in Washington. 

Dow futures sank by more than 500 points, or 1.6%, in early trading. S&P 500 futures also dropped by more than 1%, adding to losses from last week. The CBOE Volatility Index, or Vix (^VIX), jumped by more than 30% as a confluence of concerns roiled markets.  

Shares of China Evergrande Group (3333.HK) plunged by more than 10% on the Hong Kong Stock Exchange as fears mounted that the Chinese real estate juggernaut would collapse under a major debt burden, impacting shareholders, bondholders and potentially triggering turmoil elsewhere across global markets. The specter of a broader crackdown by the Chinese government on Hong Kong’s real estate sector further added to concerns. 

Meanwhile, heated debates in Washington over increasing the government’s borrowing limit built on the risk-off tone in markets. U.S. Treasury Secretary Janet Yellen called for Congress to raise the U.S. debt ceiling again in a Wall Street Journal op-ed, and suggested that to do otherwise would risk leaving the government to default on payments and generate “widespread economic catastrophe.” The U.S. House is set to vote this week on the debt ceiling and a stopgap spending measure to keep the government operating past the end of the fiscal year at the end of September. 

Even heading into Monday’s session, the three major U.S. stock indexes had dipped so far in September amid escalating concerns over the Delta variant, pace of the economic recovery, inflation and path forward for monetary and fiscal policy. Retail sales data last week suggested the consumer was turning back towards goods rather than services spending amid the latest wave of the coronavirus, and still-weak consumer sentiment data suggested many individuals were becoming increasingly concerned about inflationary pressures.

And on the monetary policy front, the prospects of a near-term shift to present ultra-accommodative policy posturing from the Fed has also injected additional uncertainty into markets. The Federal Open Market Committee is slated to hold its two-day policy-setting meeting Tuesday and Wednesday, with the event culminating in a new monetary policy statement, update economic projections, and press conference from Federal Reserve Chair Jerome Powell.

One of the major focuses at this week’s meeting will be about whether the Federal Reserve ramps up its signaling around when it will begin to taper its crisis-era asset purchase program. The central bank has suggested this quantitative easing — which currently comprises purchases of $120 billion monthly in Treasurys and mortgage-backed securities — would begin once the economy made “substantial further progress” toward the Fed’s goals on inflation and employment. 

“While we readily admit that the Committee could make changes to the September statement to signal that tapering is drawing closer, we believe the soft August hiring print and recent surge in COVID cases added enough uncertainty to the economic outlook that would refrain officials from making substantive changes to the wording,” Sam Bullard, senior economist for Wells Fargo, wrote in a note on Sunday. 

“If the economic data improves sufficiently over the coming weeks, then Fed officials could use public comments throughout October to signal that tapering will commence in November,” he added. 

For investors, the Fed’s move on tapering will be closely watched given that the asset purchases were one major tool the central bank used to bolster liquidity and support the economic recovery during the pandemic, and had by extension helped underpin stocks’ rise to record highs. 

Though stocks have lost some of their momentum in September so far, some strategists believe the move may be temporary. 

“You have to look at where the crowding is, and right now, there’s so much negative sentiment with regard to the market. It’s why we have been buying this dip this week and telling our clients that we think the market setup is perfect for a pretty big rally for the rest of September and possibly the beginning of October,” Eddie Ghabour, Key Advisors managing partner, told Yahoo Finance on Friday. “The next big hurdle we have to get through is the Fed meeting on Wednesday. If the Fed doesn’t disappoint, I think it’s a risk-on rally … right now everyone is so pessimistic about the market, and in our opinion markets don’t crash when everyone is positioned for it.” 

6:57 a.m. ET Monday: Stock futures plunge, Dow drops 500+ points

Here were the main moves in markets as of Monday morning: 

  • S&P 500 futures (ES=F): -56.75 points (-1.28%) at 4,365.00

  • Dow futures (YM=F): -541 points (-1.57%) to 34,921.00

  • Nasdaq futures (NQ=F): -152.25 points (-0.99%) to 15,173.75

  • Crude (CL=F): -$1.43 (-1.99%) to $70.54 per barrel

  • Gold (GC=F): +$8.20 (+0.47%) to $1,759.60 per ounce

  • 10-year Treasury (^TNX): -3.9 bp to yield 1.331%

Traders work on the floor at the closing bell of the Dow Industrial Average at the New York Stock Exchange on March 11, 2020 in New York. - Wall Street stocks dove deeper into the red in afternoon trading on March 11, 2020, with losses accelerating after the World Health Organization declared the coronavirus a global pandemic. Near 1710 GMT, the Dow Jones Industrial was down more than 1,200 points, or 5.0 percent, at 23,777.17. The broad-based S&P 500 slumped 4.6 percent to 2,749.88, while the tech-rich Nasdaq Composite Index tumbled 4.4 percent to 7,979.15. (Photo by Bryan R. Smith / AFP) (Photo by BRYAN R. SMITH/AFP via Getty Images)Traders work on the floor at the closing bell of the Dow Industrial Average at the New York Stock Exchange on March 11, 2020 in New York. - Wall Street stocks dove deeper into the red in afternoon trading on March 11, 2020, with losses accelerating after the World Health Organization declared the coronavirus a global pandemic. Near 1710 GMT, the Dow Jones Industrial was down more than 1,200 points, or 5.0 percent, at 23,777.17. The broad-based S&P 500 slumped 4.6 percent to 2,749.88, while the tech-rich Nasdaq Composite Index tumbled 4.4 percent to 7,979.15. (Photo by Bryan R. Smith / AFP) (Photo by BRYAN R. SMITH/AFP via Getty Images)

Traders work on the floor at the closing bell of the Dow Industrial Average at the New York Stock Exchange on March 11, 2020 in New York. – Wall Street stocks dove deeper into the red in afternoon trading on March 11, 2020, with losses accelerating after the World Health Organization declared the coronavirus a global pandemic. Near 1710 GMT, the Dow Jones Industrial was down more than 1,200 points, or 5.0 percent, at 23,777.17. The broad-based S&P 500 slumped 4.6 percent to 2,749.88, while the tech-rich Nasdaq Composite Index tumbled 4.4 percent to 7,979.15. (Photo by Bryan R. Smith / AFP) (Photo by BRYAN R. SMITH/AFP via Getty Images)

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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Pfizer says COVID-19 vaccine works in kids ages 5 to 11 – CTV News

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Pfizer said Monday its COVID-19 vaccine works for children ages 5 to 11 and that it will seek U.S. authorization for this age group soon — a key step toward beginning vaccinations for youngsters.

The vaccine made by Pfizer and its German partner BioNTech already is available for anyone 12 and older. But with kids now back in school and the extra-contagious delta variant causing a huge jump in pediatric infections, many parents are anxiously awaiting vaccinations for their younger children.

For elementary school-aged kids, Pfizer tested a much lower dose — a third of the amount that’s in each shot given now. Yet after their second dose, children ages 5 to 11 developed coronavirus-fighting antibody levels just as strong as teenagers and young adults, Dr. Bill Gruber, a Pfizer senior vice president, told The Associated Press.

The kid dosage also proved safe, with similar or fewer temporary side effects — such as sore arms, fever or achiness — that teens experience, he said.

“I think we really hit the sweet spot,” said Gruber, who’s also a pediatrician.

Gruber said the companies aim to apply to the Food and Drug Administration by the end of the month for emergency use in this age group, followed shortly afterward with applications to European and British regulators.

Earlier this month, FDA chief Dr. Peter Marks told the AP that once Pfizer turns over its study results, his agency would evaluate the data “hopefully in a matter of weeks” to decide if the shots are safe and effective enough for younger kids.

Many Western countries so far have vaccinated no younger than age 12, awaiting evidence of what’s the right dose and that it works safely in smaller tots. But Cuba last week began immunizing children as young as 2 with its homegrown vaccines and Chinese regulators have cleared two of its brands down to age 3.

While kids are at lower risk of severe illness or death than older people, more than 5 million children in the U.S. have tested positive for COVID-19 since the pandemic began and at least 460 have died, according to the American Academy of Pediatrics. Cases in children have risen dramatically as the delta variant swept through the country.

“I feel a great sense of urgency” in making the vaccine available to children under 12, Gruber said. “There’s pent-up demand for parents to be able to have their children returned to a normal life.”

In New Jersey, 10-year-old Maya Huber asked why she couldn’t get vaccinated like her parents and both teen brothers have. Her mother, Dr. Nisha Gandhi, a critical care physician at Englewood Hospital, enrolled Maya in the Pfizer study at Rutgers University. But the family hasn’t eased up on their masking and other virus precautions until they learn if Maya received the real vaccine or a dummy shot.

Once she knows she’s protected, Maya’s first goal: “a huge sleepover with all my friends.”

Maya said it was exciting to be part of the study even though she was “super scared” about getting jabbed. But “after you get it, at least you feel like happy that you did it and relieved that it didn’t hurt,” she told the AP.

Pfizer said it studied the lower dose in 2,268 kindergarteners and elementary school-aged kids. The FDA required what is called an immune “bridging” study: evidence that the younger children developed antibody levels already proven to be protective in teens and adults. That’s what Pfizer reported Monday in a press release, not a scientific publication. The study still is ongoing, and there haven’t yet been enough COVID-19 cases to compare rates between the vaccinated and those given a placebo — something that might offer additional evidence.

The study isn’t large enough to detect any extremely rare side effects, such as the heart inflammation that sometimes occurs after the second dose, mostly in young men. The FDA’s Marks said the pediatric studies should be large enough to rule out any higher risk to young children. Pfizer’s Gruber said once the vaccine is authorized for younger children, they’ll be carefully monitored for rare risks just like everyone else.

A second U.S. vaccine maker, Moderna, also is studying its shots in elementary school-aged children. Pfizer and Moderna are studying even younger tots as well, down to 6-month-olds. Results are expected later in the year.

——

AP journalist Emma Tobin contributed to this report.

——

The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Department of Science Education. The AP is solely responsible for all content.

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Evergrande's Moment of Truth as Bond, Bank Loan Deadlines Near – Bloomberg Markets and Finance

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