After failure in Texas, DMG Blockchain (DMGI.V) returns to Canada with new mining facility in Christina Lake, BC

DMG Blockchain Solutions (DMGI.V) has been contracted to host 1,000 new miners for a new United States based client at their Christina Lake, British Columbia, facility.

DMG was a client of our sister site Equity Guru until about this time last year, and during that time they spent a fair amount of time building out their business. What they do is offer management, operations and development for blockchain, and more specifically, Bitcoin. Essentially, they’re bitcoin miners with a little extra tinkering around the infrastructure, and have been since 2016 when it was likely a lot more lucrative. Nowadays, though, now that the market is saturated with proof-of-work server farms, taking advantage of cheap electricity in the Canadian maritimes, old school companies like DMG are beginning to feel the squeeze.

DMG announced in October of last year that they had been managing Bitmain’s Texas facility after installing 15,000 miners. DMG and Bitmain have since cancelled that agreement because it got too expensive, and they didn’t produce enough bitcoin. Now DMG and Bitcoin are continuing to look elsewhere for places to collaborate, including the latest news about the Christina Lake facility.

“DMG made a decision to focus on attracting large scale hosting clients as profitable crypto-mining is a function of creating cost efficiencies, and our mining facility is well suited for industrial miners,” said Sheldon Bennett, DMG’s chief operating officer.

Don’t mess with Texas

Texas seems like a strange place to do proof-of-work mining. It’s hot, for one thing, and those ASIC-rigs aren’t going to cool themselves. At least in the backwoods of St. Johns, Newfoundland or Goose Bay, Labrador, you’d have the option of opening the doors during the winter to let the icy cold wind reduce the temperature on your ASIC rigs. That way you could save money on your air conditioning bill.

Here’s what the temperature looks like in Texas right now:


A little cloudy with maybe a slight breeze suggesting a chance of rain. Perfect weather for a cold beer on the porch with your wife and/or dog after work. Not so good for ASIC-rigs. And that’s in January, when comparatively it’s presently -19 Celsius with a wind-chill that would make a polar bear think twice about going outside.

But there’s something else about doing bitcoin mining in Texas that really leaps out. Where is that electricity coming from? Cryptostar’s (CSTR.V) maritime mining operation is fuelled by Newfoundland Hydro’s Churchill Falls Generating Station. How about Coinmint in Massena, New York? Subsidized hydro. And the $20 million facility in Walla Walla, Washington? Hydroelectric.

Bitmain (and therefore, DMG) are getting their power from the Electric Reliability Council of Texas (ERCOT), which manages the flow of electric power on the Texas Interconnection that supplies power to more than 25 million Texas customers – representing 90 percent of the state’s electric load.

Here’s a pie-graph of the origin breakdown:

Source: scientificamerican.comMore than 2/3 of that pie chart consist of fossil fuels. So while management of the Texas operation have not proven to be cost efficient or effective for both partners, there’s a third player in this farce that’s been negatively effected. The planet.

Now that DMG (and Bitmain) have moved back up beyond the 49th parallel to Christina Lake, maybe they can get back to the business of not-damaging the environment.

—Joseph Morton

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