The Hardware/Software Landscape
As of May 22, 2018, the Bitcoin mining industry was undergoing a seismic shift in where and how operations were being run. With Bitcoin trading at $8,041 and the broader cryptocurrency market experiencing a significant pullback from its December 2017 highs, miners across North America were scrambling to find jurisdictions with cheap electricity. Quebec had emerged as one of the most attractive destinations, thanks to Hydro-Québec’s abundant hydroelectric power and industrial electricity rates that could dip below 5 cents per kilowatt-hour — a fraction of what miners were paying in places like China’s Sichuan province or the American Midwest.
The dominant mining hardware of the era was Bitmain’s Antminer S9, which delivered approximately 14 terahashes per second while consuming around 1,372 watts. At current Bitcoin prices and difficulty levels, these machines remained profitable — but margins were thinning rapidly. Mining operations ranging from 20-megawatt garage setups to 250-megawatt industrial complexes had flooded into Quebec, drawn by the promise of cheap, clean hydroelectric power. The sheer volume of applications had overwhelmed the provincial utility, forcing Hydro-Québec to confront uncomfortable questions about whether this influx was actually benefiting the province’s economy.
Hashrate and Difficulty
The Bitcoin network’s total hashrate in May 2018 was hovering around 35 exahashes per second, a dramatic increase from just 12 EH/s at the start of the year. This exponential growth was being driven by the deployment of increasingly efficient ASIC miners, with Bitmain’s Antminer S9 leading the charge. Mining difficulty had been adjusting upward consistently, with each bi-weekly recalibration pushing smaller, less efficient operations closer to the edge of profitability.
The concentration of mining hardware in specific geographic regions — particularly those with access to cheap electricity — was creating a paradox. While decentralization was a core tenet of Bitcoin’s design philosophy, economic realities were driving miners toward centralized hubs. Quebec’s hydropower made it a magnet, with dozens of companies submitting applications for new mining facilities. Hydro-Québec reported receiving requests totaling over 10,000 megawatts of capacity — far exceeding what the utility could reasonably allocate without impacting other industrial and residential customers.
Profitability Metrics
With Bitcoin at $8,041 on May 22, 2018, an Antminer S9 operating at 14 TH/s with an electricity cost of 5 cents per kWh was generating roughly $4 to $6 in daily profit. However, miners in jurisdictions paying 10 cents per kWh or more were seeing their margins compressed to near zero, and in some cases turning unprofitable entirely. The economics of mining were becoming a race to the bottom on electricity costs, which is precisely what had driven so many operators to Quebec’s doorstep.
The IEA would later estimate that Bitcoin mining consumed approximately 45 terawatt-hours of electricity in 2018 — a staggering figure that placed the network’s energy usage on par with some small nations. This energy intensity was becoming a public relations liability for the industry, and Hydro-Québec’s announcement on May 22 added fuel to the fire by questioning whether the economic benefits of hosting mining operations justified the strain on the province’s electrical grid.
Environmental Impact
Hydro-Québec’s press release on May 22, 2018, titled “Cryptocurrency Mines: Limited Economic Impact,” delivered a gut punch to the mining industry’s expansion plans in the province. The utility’s analysis found that cryptocurrency mining operations created remarkably few jobs relative to their massive electricity consumption. Specifically, a 250-megawatt mining operation generated only 0.4 jobs per megawatt, a 75-megawatt operation created 0.7 jobs per megawatt, and a smaller 20-megawatt facility produced 1.2 jobs per megawatt. These numbers paled in comparison to traditional industrial operations, which typically generated far more employment per unit of electricity consumed.
The implications were immediate and far-reaching. Hydro-Québec used these findings to justify proposed rate increases specifically targeting cryptocurrency miners, with discussions about raising electricity costs to 15 cents per kilowatt-hour — triple the rate that had originally attracted miners to the province. The Régie de l’énergie du Québec, the province’s energy regulator, would later approve mechanisms requiring miners to bid for electricity allocations at premiums starting at 20 percent above standard industrial rates. The message was clear: Quebec’s cheap hydropower was no longer going to be a free lunch for crypto miners.
Strategic Outlook
Hydro-Québec’s May 22 report marked a turning point in the relationship between cryptocurrency mining and municipal utilities worldwide. The province’s findings — that mining operations delivered limited economic benefits despite consuming enormous amounts of electricity — provided a template that other jurisdictions would follow. Within months, Quebec would temporarily suspend new electricity allocations to crypto miners entirely, and by June 2018, the province announced it would block new energy requests from cryptocurrency operations while it sorted out a regulatory framework.
For miners, the lesson was sobering. The dream of accessing cheap, renewable hydroelectric power in a politically stable jurisdiction was colliding with the reality that local governments evaluate mining operations on their broader economic contribution — not just their willingness to pay electricity bills. The exodus from Quebec would push mining operations toward other frontiers, including parts of the United States with deregulated electricity markets, Kazakhstan, and eventually back to renewed interest in sustainable energy partnerships. The events of May 22, 2018, underscored a fundamental tension in Bitcoin mining that persists to this day: the relentless pursuit of cheap energy exists in constant conflict with the communities and regulators who control access to it.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency mining involves significant risk, and profitability depends on numerous factors including electricity costs, hardware efficiency, and market conditions. Always conduct thorough research before making mining investment decisions.
hydro quebec had every right to push back. miners were consuming industrial scale power while regular ratepayers subsidized the infrastructure. 5 cents per kwh was way too cheap
5 cents per kwh was basically a subsidy for miners at the expense of quebec residents. the province was right to rethink that deal
The economic impact report was devastating for mining operations. It showed that for every job created, the province was losing money on energy infrastructure upgrades.
the economic report basically said miners contribute nothing to local economy. they bring their own hardware, hire few locals, and export profits. rough look
thats the dirty secret of mining economics. the jobs number is always tiny because once the machines are running you need like 3 guys to watch them. its not a jobs program
S9 at 14 TH pulling 1372 watts. we thought that was efficient back then. my S9 collection sounds like a jet engine now
250 megawatt operations flooding into a province with limited grid capacity. The queue for new industrial connections was years long even before crypto miners showed up.