A decade ago, news about a Canadian company building a new mining facility may have brought visions of potash or nickel to mind. That’s not the case anymore.
HIVE Blockchain Technologies has announced an agreement with their largest shareholder, Genesis Mining, to finance the construction of a cryptocurrency mining data centre in Sweden. This new Swedish data centre will be a state-of-the-art GPU mining facility meant for completion by December 2017.
The new centre will allow for HIVE to increase its mining capacity (or hashpower, as it is called in the industry) by 175 per cent. The centre is expected to cost around $22 million to construct, and Genesis will be responsible for hosting and maintaining the space.
To break it down a bit, when it comes to mining cryptocurrency, the currency must be “discovered” by using computers around the world to compete with one another and mine.
Cryptocurrency transactions are made all the time but unless someone makes a record of it, no one would keep up with it all. The network keeps up with this by collecting all the transactions made during a set time and turning it into a block. It is a miner’s job to confirm these transactions and write them into a ledger.
That ledger is a long list of blocks, known as a blockchain. These ledgers must be trustworthy so that whenever a new chain is produced, it goes through a process where a mathematical formula is applied, turning a large amount of information into a shorter version called a hash. Because each hash is made with the information of the hash previous to it, it becomes a kind of digital wax seal, guarding against fraud. Each time a miner successfully creates a hash, they are rewarded with cryptocurrency.
Completion of the Swedish mining centre is subject to a few conditions, mainly the acceptance by the TSX Venture Exchange. HIVE Blockchain was one of the first blockchain companies to trade on the exchange.
Genesis already has a mining facility in Iceland and this new centre will boost HIVE’s ability to provide Genesis a footprint outside the cryptocurrency world and enter more traditional market space.
“With the help of Genesis, Sweden represents the next stage of growth for HIVE as we continue to build our portfolio of mining facilities,” said Harry Pokrandt, president and CEO of HIVE. “We will continue to evaluate other opportunities to ensure we provide our shareholders the best exposure to the blockchain and cryptocurrency.”
HIVE was founded in Vancouver and helps to connect blockchain with more regulated market opportunities. The market is certainly there, as Bitcoin recently hit $5,000 USD earlier this month and actually pushed past $6,000 for a few days.