Kahnawake to seek more energy for crypto mining

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The Mohawk Council of Kahnawake (MCK) has authorized a new entity of its own creation, Kahnawake Blockchain Technologies, to apply for additional electricity from Hydro Quebec with the intent of exploring crypto-mining opportunities.

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Crypto-mining refers to the process of using computers to “mine” new units of existing cryptocurrencies like Bitcoin, decentralized digital currencies based on a technology called blockchain. While the MCK’s interest in crypto-mining, first revealed in spring, is still being described as preliminary, attaining the extra power is a necessary step as the process is energy intensive.

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The idea was brought to the MCK by a company called Pow.re, which has experience in the industry, as a potential partnership that would not require the use of community funds.

“With zero investment and an opportunity here to create a new industry, or at least a new industry within Kahnawake, it’s exciting for revenue generation and for the development of services,” said MCK chief Mike Delisle, who leads the economic development portfolio.

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“Now our revenue generation and business development team has a mandate to sit down and formally negotiate terms of a possible agreement with Pow.re,” he said.

“The financial risk to the community is very minimal,” said Paul Rice, local spokesperson for Pow.re. “Pow.re is a well-financed company, and they’re well-positioned in the crypto industry.”

He said the company is mindful of reaching an agreement that would be beneficial to Kahnawake while mitigating negative impacts and community risk.

There would be a fixed lease, for instance, and Kahnawake would receive a percentage of the Bitcoin mined. The mining rigs would likely be housed in shipping containers on land already cleared, meaning minimal impact to the grounds and easy removal, said Rice.

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“What it allows for is basically a free roll on the upside of the price of Bitcoin,” he said.

While cryptocurrency values are known to be volatile and tokens become more difficult to mine over time, meaning the long-term viability of the project is unknown, Delisle doesn’t feel this should stop the community from exploring the possibility.

“I won’t say it’s contingent on the longer-term approach because if anybody had a crystal ball, we’d all be billionaires and have invested in crypto mining way back when,” he said.

Some community members are worried about the environmental impact of crypto-mining, however, something Delisle acknowledges.

“We share the concerns environmentally,” said Delisle. “KEPO (Kahnawake Environment Protection Office) will be asked to be involved, obviously, and conduct the types of studies and research required as well as involvement in it moving forward.” He added that some of the heat generated by a crypto-mining operation could be captured and used.

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According to Rice, the energy available from Hydro Quebec fits Pow.re’s vision of environmentally-conscious crypto-mining; the company’s website emphasizes the use of renewable and “stranded” energy.

In addition to environmental concerns, there have been complaints that Council seems to be moving too unilaterally on the economic project.

“Now don’t get me wrong, I am totally in favour of pursuing blockchain opportunities for the community,” said community member Jeremiah Johnson, who began investing in cryptocurrency during the pandemic. “But not without the prior informed consent of the community you’re supposed to represent.”

He believes the MCK should be more conscientious about including the community in governance. “That’s how we build trust between Council and community, by working together,” he said, adding that he doesn’t personally believe the MCK should be engaged in business activities.

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Council insists the project is still in an exploratory phase, however, despite the intention to bid on a new power allocation. The extra energy does not commit Kahnawake to the project, according to Delisle, as the power allocation is inherently valuable and could be put to other uses.

Once more details are hashed out and the impacts of a crypto-mining project are better understood, the community will be consulted, according to Delisle.

“We’re doing this on behalf of and for the benefit of the community,” said Delisle. “It’s not something we’re looking to do quickly and hastily and without any of these issues determined.”

This story was funded through the Local Journalism Initiative.