Cryptocurrency Mines: Limited Economic Impact

Cryptocurrency Mines: Limited Economic Impact

Hydro-Québec commissioned the firm KPMG to analyze the economic spinoffs of the cryptocurrency mining sector. The study reveals that unless it is associated with additional activities, cryptocurrency mining does not generate many jobs.

The KPMG study assesses direct job creation per MW of power demand. According to the report, the larger the mining operation, the fewer jobs created.

Examples from projects submitted to Hydro-Québec in recent months indicate the following number of direct jobs created:

• 0.4 per MW for a 250 MW operation
• 0.7 per MW for a 75 MW operation
• 1.2 per MW for a 20 MW operation

These results are below those in other sectors that consume large amounts of energy. For instance, in another study conducted in 2017, KPMG concluded that data centers create between 5 and 25 jobs per megawatt.

Maximizing Economic Spinoffs

KPMG’s analysis nonetheless demonstrates that the level of economic value creation has the potential to increase if cryptocurrency mining is accompanied by additional activities. It mentions five activities in the mining global value chain that could maximize economic spinoffs if carried out in Québec:

• manufacture, assembly or repair of mining equipment
• distribution of mining equipment
• software development
• research and development
• implementation of an IT support service center

Read the KPMG report.