As the buzz around bitcoin continues to reverberate across the globe, many large global cryptocurrency players have been quietly building inroads in Manitoba in search of cheap electricity to run their power-hungry operations.

Following several interviews with commercial real estate companies, economic development organizations, cryptocurrency industry players and Manitoba Hydro, CBC News has learned that several dozen out-of-province and international investors view Manitoba as a top-tier location to establish their cryptocurrency operations.

CentrePort Canada, which manages 20,000 acres of low-cost industrial land in Winnipeg, says early on the interest came from Chinese investors, but they're now seeing curious investors from Argentina and companies in other South American countries.

This bitcoin mining operation has over 4,500 computers running 24/7 in an undisclosed area in Quebec. (Philippe Dubois/Radio-Canada)

"We've had inquiries from very large non-Asian companies, some of which have roots in North America and are looking to expand significantly," said CentrePort president and CEO Diane Gray.

"They're having site visits and meetings with Manitoba Hydro and whomever else they feel are relevant to their decision-making process. So I would say strong interest, but still speculative."

Why Manitoba could be a bitcoin hot spot

The process by which cryptocurrencies — or digital currencies, with bitcoin being the most popular at the moment — are created and exchanged requires a tremendous amount of computing power.

In lieu of a central banking authority controlling transactions involving cryptocurrencies, a public digital ledger controlled by a network of users records every virtual-currency transaction.

However, this record-keeping process requires computers around the globe to solve complex mathematical problems and then verify the output. When this is complete, the transaction and the solved equation is added to what is called a "blockchain" as a permanent record.

People who purchase these specialized math-solving computers around the world don't do it for free. Their reward is payment through the creation and issuance of new bitcoin. They become, essentially, tech-era gold miners — hence the term "bitcoin miners."

But each transaction is estimated to consume between 200 to 250 kilowatt hours of power, which is roughly enough electricity to run the average household for a week. There are currently just under 400,000 such transactions daily.

On top of that, the computers generate intense heat and must be continuously cooled.

And so, thanks to the cheapest commercial hydro electricity rates in the country — and among the lowest average annual temperatures of major North American cities — bitcoin miners have Manitoba, and Winnipeg, in their sights.

Few facilities have enough power

Canadian commercial real estate group CBRE says there are currently dozens of groups looking for properties throughout the province.

"The issue is that this commands a tremendous amount of power, so much so that in my discussions with [Manitoba] Hydro about what they can offer in terms of power at any particular locations in the city of Winnipeg, there are few, frankly, if any sites that work," said Ryan Behie, vice-president and managing director for CBRE Winnipeg.

"We've looked at sites along major transmission lines within Winnipeg and they haven't been able to meet the needs of groups that I've been working with."

Bob Antymniuk, senior director of sales and leasing with Capital Real Estate, says his team has fielded several calls since the fall.

"Count your fingers and toes and add more in terms of the all-of-a-sudden interest," he said.

But he's facing the same challenges as others.

"There's not many of those types of buildings that have the types of power requirements that these guys want."

Manitoba Hydro taking cautious approach

Any major bitcoin mining operation will invariably have to convince Manitoba Hydro officials to supply it with the additional power upgrades required. However, unsure as to whether cryptocurrencies are merely a bubble, the public hydroelectric power utility is proceeding with caution.

"The key difference lately has been the magnitude of the requests to establish dedicated bitcoin and cryptocurrency farms," said Manitoba Hydro spokesperson Bruce Owen.

"To put the potential consumption into perspective, the cryptocurrency requests coming into Manitoba Hydro recently are for the equivalent electric consumption of about 1,900 average Manitoba homes."

He said some recent power-upgrade requests have been five to 20 times larger than what Hydro has seen in the past.

"We need the benefit of some time to pass to better gauge how many of these requests result in actual, physical operations being installed in Manitoba," said Owen.

"We don't want to be stranding our assets — extending service and then having that bubble burst and then having a high level of electricity serving something that doesn't exist anymore."

Province could lose out, says miner

According to one local cryptocurrency expert, there are over 20 facilities of varying size in the province currently mining bitcoin, but because most operations go out of their way to keep a low profile for competitive reasons, it's impossible know the exact number.

"If it ends up turning into a situation where it does become concrete for the long term, we will risk giving up our early lead in the industry to other players around the world, which will unfortunately [mean losing] out on job opportunities for Manitobans in high-tech jobs," said Nick Burley, chief operating officer of Fiber Hosting, a Winnipeg web hosting company.

Burley, himself a bitcoin miner, estimates there are about 100 highly-skilled people currently employed with mining operations in the province.

"If it is seen that Manitoba is too slow to react to the demand, then it could be a situation where we lose competitiveness in that space."

Hydro-Québec vying for data centre business

According to industry experts, the other region in Canada many mining operations are looking to is Quebec, since that province's power costs and temperatures are nearly as low as Manitoba's. But unlike Manitoba, Quebec is signaling that cryptocurrencies and data centres are very much part of their future revenue strategies.

"We launched an offensive in 2016 to attract data centres in Quebec," says Marc-Antoine Pouliot, a spokesperson for Hydro-Québec.

"We have an overproduction of power, we have low hydro rates and there's a massive market for data centres, so we launched a commercial offensive to attract these groups to Quebec."

These bitcoin 'mines' solve complex mathematical problems as part of the bitcoin transaction process. As a result they produce large amount of heat and consume massive amounts of power. (Bahador Zabihiyan/Radio-Canada)

He says the utility is currently in discussion with 10 clients.

"This is absolutely now part of our revenue strategy," says Pouliot.

'Huge marketing opportunity' for Manitoba

Mike Golden, president of Winnipeg's Ingenuity Developments — which has commercial tenants currently mining — says most of the bitcoin mining worldwide is happening in China, where the power supply largely comes from the burning of coal.

"Personally, I think the future of blockchain technology is going to be very large in Manitoba, very prominent here," said Golden.

The demand for cryptocurrency is showing no signs of letting up in the immediate future. Last week, Bank of Canada governor Stephen Poloz said that his own staff was currently exploring whether the central bank should consider releasing its own version of a digital currency.

"Being able to tout, in Manitoba, that we have a clean energy source to drive not just cryptocurrency mining, but all blockchain-related industries is, I think, a huge marketing opportunity for the province," said Golden.