When politicians walk around making promises, there is a saying in crypto that should come to mind: “Don’t trust. To verify’

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The recent cryptocurrency boost from conservative lawmakers Pierre Poilievre and Michelle Rempel Garner to the Alberta government has garnered a lot of attention. Last week, I appeared on two Alberta radio shows to talk about it. For one of them, at Radio-Canada, I spent an entire hour.

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Forgive me for being a bit cynical, though.

These are still boom times, with Bitcoin above US$46,000, so it’s no surprise that people want to talk about crypto.

Some announcements, like the UK government‘s announcement this week that it would mint an NFT (non-fungible token) image, are downright silly. Others seem like just a bunch of chatter.

Take, for example, the addition of bitcoin and ether to its balance sheet by accounting firm KPMG Canada, a big announcement made in February. KPMG never said how much crypto it bought, a figure that is important in determining how significant its foray into the space is. Was it worth $1 million? Was it $5? The company refused to tell me.

Then there was the announcement last summer that up to a million “bitminers” could arrive in Alberta. I followed this week. The municipality which was to host the first site tells me that it has heard nothing. Shares in the plan’s U.S. promoter, Black Rock Petroleum Co., fell to one cent US, from about $3 US at the time of the announcement. Black Rock, in fact, has made no announcements of any kind since the mining news. He did not respond to a request for comment.

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This example is particularly important because it involves the value proposition of Alberta’s adoption of crypto, which is the most credible of all, at least currently. Private member’s bills, like the one Rempel Garner recently introduced about crypto, rarely make it anywhere. And Poilievre is still two elections away from being able to deliver on his promises.

Conservative MP Michelle Rempel Garner at a press conference in Ottawa. Photo by THE CANADIAN PRESS/Files Adrian Wyld

Russia’s invasion of Ukraine may have boosted natural gas prices globally, but for many years producers in Canada’s energy heartland did not receive much money for their gas due to the lack of pipelines and the resulting huge transportation costs.

Gas that was a by-product of oil drilling was often simply burned.

But that gas can be used to generate electricity to mine cryptocurrency, a cost-effective way to use an asset whose value is often not fully exploited. In the United States, Exxon Mobile Corp. even used mining as a way to reduce its emissions by using the gas it would otherwise burn.

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In Alberta, Hut 8 Mining Corp. of Toronto already has two bitcoin mining sites with gas in Medicine Hat and Drumheller. Hut 8 called itself the largest publicly traded company of its kind. It’s indicative of Alberta’s potential. In Drumheller, Hut 8 even sponsors local hockey.

The problem, however, is that for every Hut 8 that legitimately builds the industry, there are many outsized promises like Black Rock Petroluem’s million bitminers.

While we may never know what really happened to the plans of those millions of miners, I do know how a similar story ended.

I lived in Alberta during the last bitcoin boom, in 2017. Much of today’s crypto buy-ins by mainstream institutions are eerily familiar as they echo announcements from the time. Then, as now, the focus was on Alberta and mining, and many of those earlier announcements have not aged well.

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In 2018, Iron Bridge Resources Ltd. of Calgary said it would mine cryptocurrency with its gas. The world never heard much about it afterwards, but I followed recently. Before the end of 2018, Iron Bridge was purchased by Velvet Energy Ltd., which was itself purchased by Spartan Delta Corp. in 2021. Spartan told me that Velvet shut down mining because it was not part of the main business.

Alberta, of course, doesn’t just have mining. Binance, the world’s largest cryptocurrency exchange, got incorporated amid its troubles with the Ontario Securities Commission. The concept of a “regulatory sandbox” announced by the provincial government in March, which would grant some companies temporary relief from the rules, is also not a bad idea.

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But as with mining, we’ve heard it all before. The umbrella organization Canadian Securities Administrators used the exact same term “regulatory sandbox” in 2017 and so Canada has not become a cryptocurrency hub.

None of this is necessarily anyone’s fault. It’s just that it’s only been a 13-year-old, largely experimental industry. Everyone’s adoption of crypto is its own complicated story, and just having a good idea doesn’t mean it will always translate into a good implementation.

When politicians make promises, there is a saying in crypto that should come to mind: “Don’t trust. To verify.”

Ethan Lou is a journalist and author of Once a Bitcoin Miner: Scandal and Unrest in the Wild West of Cryptocurrency.



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