Getting into bitcoin mining

Some cryptocurrenciesVirtual currency, used to exchange goods or services on a peer-to-peer basis, usually independently of the banking system or any monetary policy, whose issuance and transactions are based on blockchain technology., including Bitcoin, are issued based on a consensus mechanism called proof of workTransaction validation mechanism based on solving a complex cryptographic problem., where people called minersPerson who validates and secures, for a block, the transactions on a cryptocurrency network using a consensus mechanism. For each block validated, the miner gets a block reward. perform an activity called miningOperation, based on a consensus mechanism, that enables blocks to be added to a cryptocurrency network in exchange for a block reward., which involves using computers to validate the blocks added to a blockchainA secure, distributed database that stores transactions between users, from the date of its creation, in a chronologically ordered sequence of blocks that are linked together. and all the transactions they contain.

For each new block that’s created, miners receive a block rewardAmount of a cryptocurrency awarded to a miner or a group of miners as compensation for creating a block and as an incentive to participate in the network. A block reward can consist of tokens or coins generated when the block is created or associated transaction fees.. For some cryptocurrencies, block rewards are the means by which new tokens or coinsA cryptocurrency’s basic unit of value, usually used for payments or to access services through decentralized applications. The value of a cryptocurrency token or coin goes up and down based on supply and demand. are issued.

What is a mining farm?

A mining farm is a location, usually a large space, housing several computers dedicated to mining one or more cryptocurrencies.

The computers consume a lot of energy, and air conditioning is needed to prevent them from overheating. Québec is an attractive location for this type of activity because of its cold winters and cheap electricity.

Even so, mining is expensive. In addition to using large amounts of electricity, the computers need to be replaced frequently. Mining farm promoters therefore need capital to start up, expand and maintain their farms. The type of investment proposed can vary from one mining farm to the next. For example, a promoter may:

• launch an initial cryptocurrency offering (ICO)
• ask investors to buy the computer equipment that will be housed and used for mining at the farm
• issue debt (e.g., bonds) or equity securities (e.g., shares)