WEBVTT - A Canadian Ghost Town Takes a Gamble on Bitcoin 0:00:04.559 --> 0:00:06.600 Most people are down the road and there's sort of 0:00:06.800 --> 0:00:10.480 maybe hundred houses, maybe a little bit less than that. 0:00:11.880 --> 0:00:13.880 This summer, I spent some time in a remote town 0:00:13.920 --> 0:00:17.280 along the coast of Canada, about three hundred miles northwest 0:00:17.320 --> 0:00:20.200 of Vancouver. It's called Ocean Falls. He used to be 0:00:20.239 --> 0:00:23.560 a paper mill town, and so these are this was 0:00:23.640 --> 0:00:25.840 part of the paper facility. The blue building that you 0:00:25.840 --> 0:00:29.440 guys are in that. Yeah, this was so this was 0:00:29.520 --> 0:00:32.160 all buildings here and most of them were torn down 0:00:32.200 --> 0:00:34.720 about ten years ago. The mills just downstream from a 0:00:34.800 --> 0:00:38.000 dam that was built in the early nineteen hundreds. Ocean 0:00:38.000 --> 0:00:40.560 Falls is surrounded by steep hills covered in thick forest, 0:00:40.760 --> 0:00:42.599 and it sits on a deep bay that empties out 0:00:42.640 --> 0:00:45.440 into the Pacific Ocean. Ocean Falls had been a town 0:00:45.479 --> 0:00:48.160 of about five thousand people until the mill shut down. 0:00:48.840 --> 0:00:51.360 Now it's less than a hundred. It's almost a ghost town. 0:00:51.479 --> 0:00:53.400 That's where the wood would come down and then it 0:00:53.440 --> 0:00:55.440 would be uh, they're the big grinders in there. They 0:00:55.480 --> 0:00:57.920 would grind the wood up into With the mill gone, 0:00:58.360 --> 0:01:01.760 Ocean Falls began looking for some new business, anything to 0:01:01.840 --> 0:01:05.679 keep the community alive. It's latest hope comes from Kevin day. 0:01:06.600 --> 0:01:09.040 Kevin's a tech guy from Vancouver, and he's the one 0:01:09.080 --> 0:01:14.920 showing me around here, and do you need to use 0:01:14.920 --> 0:01:23.840 you wear a hard hats. Borre Lex is the private 0:01:23.920 --> 0:01:27.480 utility company that operates the damn in Ocean Falls, but 0:01:27.600 --> 0:01:30.759 Kevin doesn't work there. He's actually bora Lex's new customer. 0:01:32.240 --> 0:01:42.120 Is that sound you guys, Yes, that huney you here. 0:01:42.640 --> 0:01:45.520 It's the sound of hundreds of fans blowing past hundreds 0:01:45.560 --> 0:01:48.120 of little computers. They're on twenty four hours a day 0:01:48.560 --> 0:02:03.400 cranking through complicated math problems making bitcoins. Hi, I'm Pegatari 0:02:03.920 --> 0:02:07.400 and I'm Joshua Bursting. And this week on Decrypted, we're 0:02:07.440 --> 0:02:10.320 bringing you the story of Ocean Falls, a town on 0:02:10.360 --> 0:02:13.400 a multi decade search for a savior that thought it 0:02:13.520 --> 0:02:16.160 might have found one when a bitcoin mine came to town. 0:02:16.960 --> 0:02:19.480 This is the first episode of our new season, where 0:02:19.480 --> 0:02:22.639 for the next four months will be exploring the unintended 0:02:22.680 --> 0:02:26.760 consequences of technology. The biggest problem for Ocean Falls was 0:02:26.760 --> 0:02:29.639 its isolation. It was just too much trouble to bring 0:02:29.680 --> 0:02:33.440 workers there and too expensive to ship goods out. But 0:02:33.480 --> 0:02:36.519 those things don't matter much for bitcoin miners. All they're 0:02:36.560 --> 0:02:38.880 looking for is cold weather to keep their computers cool 0:02:39.480 --> 0:02:42.840 and enough electricity to keep them running. Ocean Falls has both. 0:02:43.520 --> 0:02:45.840 But if a town is good for bitcoin mining, does 0:02:45.880 --> 0:02:49.240 that mean bitcoin mining is good for the town. And 0:02:49.320 --> 0:02:52.040 while it may have seemed promising when prices were soaring, 0:02:52.440 --> 0:03:03.640 what happens now that they've crashed? Stay with us. I 0:03:03.720 --> 0:03:06.480 first heard about Ocean Falls in January. I was talking 0:03:06.520 --> 0:03:09.960 to a businessman in Toronto who invested in cryptocurrency businesses, 0:03:10.760 --> 0:03:12.880 and he mentioned that bitcoin miners have been taken an 0:03:12.880 --> 0:03:15.880 interest in old mill sites in British Columbia. That immediately 0:03:15.919 --> 0:03:19.399 caught my attention. The bitcoin gold rush was all over 0:03:19.440 --> 0:03:23.359 the news. Bitcoin stores past thou dollars for the first time. 0:03:23.560 --> 0:03:27.240 It's up, and it's up big for this about since 0:03:27.320 --> 0:03:29.799 nine thirty this morning, New York Times, six thirty R time. 0:03:30.000 --> 0:03:32.240 I think that we're going to see fifty by the 0:03:32.400 --> 0:03:36.520 end of two thousand eighteen for bitcoin. It's easy to 0:03:36.520 --> 0:03:40.680 think of bitcoin is something that's happening just online. In fact, 0:03:40.760 --> 0:03:42.920 the price runup had set off a global race to 0:03:42.960 --> 0:03:46.120 find actual physical places that are well suited for the 0:03:46.200 --> 0:03:49.200 data centers and needed to create new bitcoins through a 0:03:49.240 --> 0:03:52.520 process known as mining. And here was a place where 0:03:52.520 --> 0:03:57.840 the crypto rush felt like an actual gold rush, so 0:03:57.880 --> 0:04:00.560 I asked for an introduction to Kevin. He agreed to 0:04:00.600 --> 0:04:02.840 talk to me, and I began checking in with him 0:04:02.880 --> 0:04:05.640 every once in a while as he traveled between Vancouver 0:04:05.760 --> 0:04:08.960 and Ocean Falls over the course of this year. Finally, 0:04:09.040 --> 0:04:12.400 in July, I headed up there myself with Jackie Dives, 0:04:12.400 --> 0:04:15.720 a photographer based in Vancouver. And it's a trek because 0:04:15.880 --> 0:04:19.120 there's no road to get there. Yeah. From Vancouver, I 0:04:19.160 --> 0:04:21.440 took two little hops and a twenty person playing to 0:04:21.520 --> 0:04:24.200 Bella Bella, which is the closest town with an airport. 0:04:24.920 --> 0:04:27.799 Then I hitched a ride from people boating into work 0:04:27.880 --> 0:04:30.800 at a local salmon hatchery that's the only other real 0:04:30.839 --> 0:04:36.919 business in town. The boat moves through narrow channels between 0:04:36.920 --> 0:04:39.440 the mountains and then opens up into this big bay 0:04:39.680 --> 0:04:44.640 and there you are. It's unbelievably beautiful. When we got 0:04:44.680 --> 0:04:46.760 to town, Kevin was walking up to pick us up 0:04:46.760 --> 0:04:49.800 at the dock. I wonder if this is Kevin here. 0:04:51.120 --> 0:04:56.000 Kevin is an athletic guys in his mid forties. Hey Kevin, good, 0:04:56.040 --> 0:04:58.760 how are you? Kevin says he's most comfortable when sitting 0:04:58.760 --> 0:05:01.240 in front of a computer, and he's run a handful 0:05:01.240 --> 0:05:04.080 of start ups in and around Vancouver. He used to 0:05:04.160 --> 0:05:06.760 run a business selling ringtones back when that was a thing, 0:05:07.200 --> 0:05:08.600 and then he had a business that had to do 0:05:08.680 --> 0:05:12.039 with insurance. Kevin had first heard about Ocean Falls in 0:05:12.040 --> 0:05:14.480 twenty ten when he saw a TV documentary about it. 0:05:15.080 --> 0:05:17.080 He actually suggested to a friend of his and the 0:05:17.120 --> 0:05:19.080 hotel business that it might be a cool place to 0:05:19.120 --> 0:05:21.359 set up a resort, but nothing ever came of that. 0:05:22.279 --> 0:05:24.839 Then Kevin started getting interested in bitcoin in about twenty 0:05:24.839 --> 0:05:28.800 twelve and twenty thirteen. Over time, Kevin became fixated on 0:05:28.839 --> 0:05:32.360 building his own bitcoin mine. That's when he remembered Ocean Falls. 0:05:33.000 --> 0:05:36.240 Ocean Falls has this nostalgic vibe of a pioneer town 0:05:36.320 --> 0:05:38.960 in decline. At least that's how it came off in 0:05:38.960 --> 0:05:41.200 a news cost you showed me from nineteen eighty one. 0:05:45.680 --> 0:05:49.280 The good old battle days in Ocean Falls. Today, they 0:05:49.360 --> 0:05:52.960 were remembered with fond regret by the last survivors of 0:05:53.000 --> 0:06:02.640 a very special kind of town. Today most of the 0:06:02.640 --> 0:06:06.080 residents are older. They have a really romantic view of 0:06:06.120 --> 0:06:09.440 the place. Like here's Tony Zignash, who runs the small 0:06:09.480 --> 0:06:11.840 boarding house where I stayed when I was there. Every 0:06:11.839 --> 0:06:14.320 time we come around the corner into some Falls, I 0:06:14.360 --> 0:06:18.600 always think this is as close to paradise as as 0:06:18.640 --> 0:06:21.799 it gets. Still, it takes a certain type of person 0:06:21.880 --> 0:06:25.120 to live there. It may be beautiful, but it's so remote. 0:06:25.520 --> 0:06:28.320 People in Ocean Falls put up with his challenges because 0:06:28.360 --> 0:06:30.320 they seem to relish the sense of removal from the 0:06:30.320 --> 0:06:33.839 outside world. But not Kevin. No, he immediately saw the 0:06:33.839 --> 0:06:37.279 town's the setting for his own kind of secret, technological retreat, 0:06:37.600 --> 0:06:39.880 like the ones he daydreamed about when watching television as 0:06:39.920 --> 0:06:43.360 a kid. I always love this idea of like sort 0:06:43.360 --> 0:06:45.599 of this high tech sort of layer, kind of in 0:06:45.600 --> 0:06:47.080 the middle of sort of nowhere. Maybe it's sot of 0:06:47.120 --> 0:06:48.720 because I was a big fan of like James Bond 0:06:48.760 --> 0:06:50.640 movies or something like that, where they had sort of 0:06:50.640 --> 0:06:54.360 these guys they were had these Kevin's not the first 0:06:54.400 --> 0:06:57.400 businessman to fall in love with Ocean Falls. There's been 0:06:57.440 --> 0:07:00.640 a steady stream of proposals. The first one happened soon 0:07:00.680 --> 0:07:03.560 after the mill closed, when a businessman bought many of 0:07:03.600 --> 0:07:06.320 the biggest buildings in town, hoping to convert them into 0:07:06.400 --> 0:07:09.400 a resort and casino for people traveling up the coast 0:07:09.440 --> 0:07:12.440 on cruise ships. There have also been plans to brew beer, 0:07:12.880 --> 0:07:16.600 grow marijuana, and bottle water. At one point, it looked 0:07:16.600 --> 0:07:18.600 like Ocean Falls would be the setting for an action 0:07:18.640 --> 0:07:22.720 movie starting Al Pacino and Hillary Swank. My personal favorite 0:07:22.760 --> 0:07:24.920 was a plan in the nineteen eighties to fill tankers 0:07:24.960 --> 0:07:27.920 up with water and ship at wholesale to California or 0:07:27.960 --> 0:07:31.000 even Saudi Arabia. Needless to say, all of those plans 0:07:31.000 --> 0:07:33.640 have fallen flat, with the one exception of the fish 0:07:33.640 --> 0:07:39.560 farming company whose employees gave you a ride. Any business 0:07:39.560 --> 0:07:42.080 plan for Ocean Falls eventually ends up in front of 0:07:42.120 --> 0:07:45.520 Brent Case. He's the operation manager for bor Alex in 0:07:45.520 --> 0:07:48.880 British Columbia. I had talked to Brent before flying up 0:07:48.920 --> 0:07:51.840 to Ocean Falls and he spotted me and Jackie when 0:07:51.840 --> 0:07:54.240 we got off the plane. He walked over to introduce 0:07:54.320 --> 0:08:02.680 himself once we landed in Bellabella Galls. Yeah, Brent's basically 0:08:02.760 --> 0:08:05.880 Kevin's opposite. Can be hard sometimes to get Kevin to 0:08:05.960 --> 0:08:08.200 talk much, but Brent would talk all day if you 0:08:08.240 --> 0:08:12.080 didn't interrupt him. Kevin likes the city. Brent describes himself 0:08:12.080 --> 0:08:15.119 as a bush person and he loves to regale people 0:08:15.120 --> 0:08:18.280 with stories about ravens or mountain lions or bears that 0:08:18.320 --> 0:08:22.160 he's interacted with over the years. Brent has spent decades 0:08:22.360 --> 0:08:24.600 up and down this coast, in the small towns and 0:08:24.640 --> 0:08:27.240 the woods in between them. He first came to Ocean 0:08:27.240 --> 0:08:30.040 Falls in the mid eighties when he was helping string 0:08:30.040 --> 0:08:32.680 a transmission line from the power plant at the dam 0:08:32.880 --> 0:08:36.040 to a few of the neighboring towns. He's now something 0:08:36.080 --> 0:08:39.280 of a local celebrity. He bought the biggest house Notion 0:08:39.320 --> 0:08:42.040 Falls and has poured a lot of time and money 0:08:42.080 --> 0:08:45.520 into fixing it up. His star rose even more after 0:08:45.559 --> 0:08:48.520 he survived a grizzly bear attack. I was just finishing 0:08:48.600 --> 0:08:50.200 up my engineering and I was heading back to the 0:08:50.200 --> 0:08:54.080 truck and he uh jumped me on my arm and 0:08:55.920 --> 0:08:59.440 ripped the elbow. He bitten the humbol's arms and then 0:08:59.559 --> 0:09:02.840 ripped this out from here right over the head. If 0:09:02.840 --> 0:09:06.560 it did you google? Did you google? And google? Yeah? Yeah, 0:09:06.600 --> 0:09:10.240 so I did a show with the Animal Planet. That 0:09:10.320 --> 0:09:12.840 incident with the bear inspired a wave of local and 0:09:12.880 --> 0:09:20.240 even international media coverage. Then around, Brent's phone suddenly started 0:09:20.320 --> 0:09:23.000 ringing off the hook in a way it never had before. 0:09:24.120 --> 0:09:26.280 The people were calling in search of places to set 0:09:26.320 --> 0:09:31.199 up bitcoin mines. Bitcoin mining was becoming increasingly lucrative as 0:09:31.240 --> 0:09:34.120 the price sword, especially if you can find a place 0:09:34.160 --> 0:09:37.560 like Ocean Falls where the cost of power is extremely cheap. 0:09:38.440 --> 0:09:41.480 A large proportion of bitcoin mining was happening in China, 0:09:42.080 --> 0:09:45.200 but for many prospective miners, the idea of doing business 0:09:45.240 --> 0:09:48.680 in Canada was much more attractive. You know, I'm getting 0:09:49.000 --> 0:09:53.640 companies from Texas, New Jersey, California, Washington, Steed. Of course, 0:09:53.760 --> 0:09:57.320 Brenton no the first thing about bitcoin. One one company 0:09:57.320 --> 0:10:00.560 from Australia, I mean, one from Argentina, I mean. And 0:10:00.600 --> 0:10:02.400 it didn't take him long to realize that most of 0:10:02.400 --> 0:10:04.679 the people calling him had no clue how to pull 0:10:04.720 --> 0:10:07.400 off what they were proposing. A lot of the blotching 0:10:07.720 --> 0:10:11.160 people and bitcoin people and you name it. They think 0:10:11.200 --> 0:10:14.319 they can come in and do a project without you know, 0:10:14.440 --> 0:10:17.880 doing their homework. A lot of speculation, but brent also 0:10:17.920 --> 0:10:21.400 saw himself as Ocean Fall's main booster. He knew that 0:10:21.440 --> 0:10:24.040 the longer the town went on in its semi dormant state, 0:10:24.640 --> 0:10:27.000 the bigger the chance was that it would never recover. 0:10:28.280 --> 0:10:31.480 And after seeing so many other business ideas full flat. 0:10:31.880 --> 0:10:34.760 Brent thought these clueless people blowing up his phone to 0:10:34.840 --> 0:10:38.640 talk about some esoteric technology trend might be worth taking 0:10:38.640 --> 0:10:45.560 a flyer. On the first night we were in Ocean Falls, 0:10:45.720 --> 0:10:48.040 Jack and I walked up to Kevin's home to meet 0:10:48.040 --> 0:10:50.959 with Kevin, Brent, and one of Brent's colleagues, a guy 0:10:51.000 --> 0:10:55.840 named Alistair Howard. This is the house you mentioned earlier, 0:10:56.000 --> 0:10:59.040 the one that Brent had fixed up. Kevin recently bought 0:10:59.080 --> 0:11:01.760 it from him. Yeah, it's a really odd place. Once 0:11:01.800 --> 0:11:04.160 you get inside the house, it feels like a suburban home. 0:11:04.240 --> 0:11:07.520 There's new floors, a nice kitchen, even a huge flat 0:11:07.559 --> 0:11:11.199 screen TV. But to get there, Jack and I walked 0:11:11.200 --> 0:11:13.439 down a street where most of the other buildings were 0:11:13.480 --> 0:11:16.200 basically just rubble, and then we bush whacked our way 0:11:16.280 --> 0:11:18.480 up a steep trail through some brush to get to 0:11:18.480 --> 0:11:23.760 the door. Is that like little deer path? Really? The 0:11:23.760 --> 0:11:26.000 way we're supposed to get here? Could be? I've never 0:11:26.040 --> 0:11:31.000 had anyone actually comes through the front door before, even 0:11:31.040 --> 0:11:34.080 with Kevin sitting there. Brennan Alistair were pretty open about 0:11:34.080 --> 0:11:36.040 how skeptical they were of him at first. Here again, 0:11:36.080 --> 0:11:39.280 he's one another one of these I thought, hair brained ideas. 0:11:42.000 --> 0:11:46.960 So when we did we need in Vancouver first, Kevin 0:11:46.960 --> 0:11:49.560 definitely didn't change Brent's mind by coming off like someone 0:11:49.679 --> 0:11:51.640 who knew what he was talking about. When he first 0:11:51.640 --> 0:11:55.800 called in late Kevin didn't know much about electricity, he 0:11:55.880 --> 0:11:59.000 knew nothing about dams, and he had no experience navigating 0:11:59.000 --> 0:12:01.200 the shipping channels that on up and down the sparsely 0:12:01.200 --> 0:12:05.280 populated parts of Canada's West coast. But Kevin was asking 0:12:05.320 --> 0:12:09.080 the right questions and Brent was looking for someone anyone 0:12:09.160 --> 0:12:20.719 really to get excited about Kevin would do with this 0:12:20.800 --> 0:12:24.120 foot Finally in the door, Kevin developed a pretty simple strategy. 0:12:24.559 --> 0:12:26.760 Who just asked Brent for help with everything. A lot 0:12:26.760 --> 0:12:28.880 of the challenges that you you face here or not 0:12:29.480 --> 0:12:31.880 things that you can just sort of solve look on 0:12:31.920 --> 0:12:34.040 your own by you know, just doing a Google search 0:12:34.080 --> 0:12:35.680 and like, well how do I get this in here 0:12:35.760 --> 0:12:38.360 or do that? It's all sort of like, oh, you know, 0:12:38.520 --> 0:12:41.319 like Brent knows a guy for everything, right, so if 0:12:41.320 --> 0:12:42.839 there's a problem, it's like I know a guy who 0:12:42.840 --> 0:12:44.400 could do that. I know someone who could get this 0:12:44.440 --> 0:12:45.920 in here. I know who you could do this. So 0:12:46.559 --> 0:12:48.640 this was really clever on Kevin's part. I think he 0:12:48.720 --> 0:12:51.520 took Brent's enthusiasm about the town and used it to 0:12:51.559 --> 0:12:54.080 turn him into a kind of spokesperson within Bora Lax 0:12:54.160 --> 0:12:58.520 for Kevin's company, which he named Ocean Falls Blockchain. It 0:12:58.520 --> 0:13:01.880 didn't hurt that Bitcoin just kept getting more and more exciting. 0:13:02.160 --> 0:13:04.960 The price rose from about four hundred dollars in late 0:13:05.720 --> 0:13:08.840 when Kevin started making his first inquiries with Ocean Falls. 0:13:09.480 --> 0:13:11.920 A year later, the price would be closing in on 0:13:12.000 --> 0:13:16.160 a thousand dollars. Kevin wasn't the only person calling Brent, 0:13:16.400 --> 0:13:19.200 but most people would call him once realize how hard 0:13:19.240 --> 0:13:22.320 this would be and disappear. Some I call a few 0:13:22.320 --> 0:13:25.960 times before fading away, But Alistair remembers how Kevin just 0:13:26.080 --> 0:13:29.520 never stopped dialing the phone. I just remember so many 0:13:29.520 --> 0:13:33.160 times you would tell me Kevin's calling again. I'm like again. 0:13:34.520 --> 0:13:37.679 In fact, Kevin became so persistent that he turned into 0:13:37.800 --> 0:13:41.160 something of a myth inside the company. At a certain point, 0:13:41.200 --> 0:13:44.480 Kevin went to Toronto and cold called Patrick Lamaire, the 0:13:44.520 --> 0:13:47.720 president of Bolax, to ask for a meeting. And Patrick 0:13:47.760 --> 0:13:50.680 already knew who he was when I sat down with them, 0:13:50.720 --> 0:13:52.640 and he said, like I said, well, I think we're 0:13:52.640 --> 0:13:54.880 really gonna move ahead on this project, and he said, okay, 0:13:54.880 --> 0:13:56.360 well that's why I want to meet with you, because 0:13:56.360 --> 0:13:57.560 I want to see if you were like a real 0:13:57.600 --> 0:14:01.480 person being here hearing about your name while this time. 0:14:01.520 --> 0:14:03.560 But that's nothing's ever happened. It's been two years, so 0:14:03.640 --> 0:14:05.920 are are you real? Is it's really going to happen. 0:14:08.440 --> 0:14:11.199 Patrick had a decision to make. Should he agree to 0:14:11.240 --> 0:14:15.120 sell cheap electricity to Kevin? The bitcoin mine might work 0:14:15.160 --> 0:14:17.520 out well as a business, but it was unlikely to 0:14:17.559 --> 0:14:20.400 make much of a difference to Bora ax Kevin's plans 0:14:20.400 --> 0:14:23.520 were to make just under six million dollars in revenue. 0:14:24.400 --> 0:14:28.200 Bora axes annual revenue is about three fifty million, but 0:14:28.240 --> 0:14:30.600 the utility didn't have a lot of other options for 0:14:30.640 --> 0:14:33.400 ocean falls. Bora lex Is only using two of the 0:14:33.480 --> 0:14:36.640 dam's four turbines because there would be nowhere else to 0:14:36.720 --> 0:14:40.440 send the electricity they'd produce. So Kevin secured his deal 0:14:40.560 --> 0:14:43.120 to buy hydro electric power from Bora Lax at a 0:14:43.160 --> 0:14:47.240 heavily discounted rate. This was basically an incentive to get 0:14:47.320 --> 0:14:49.160 him to set up his business in a place that 0:14:49.200 --> 0:14:53.080 would otherwise not make much sense. Neither Kevin nor Brent 0:14:53.160 --> 0:14:56.920 wanted to discuss the specific price. That's probably because it's 0:14:57.000 --> 0:15:01.479 so low. According to a presentation and showed investors in February, 0:15:02.000 --> 0:15:04.200 it was less than four cents per kill a lot hour. 0:15:05.080 --> 0:15:07.160 That's less than half the rate boro Lex charged to 0:15:07.200 --> 0:15:11.480 ship power to Bella Bella even back in the rates 0:15:11.560 --> 0:15:14.400 solo that the head of another bitcoin mining operation in 0:15:14.440 --> 0:15:18.680 the area described it as almost free. The power from 0:15:18.680 --> 0:15:22.680 the Ocean Falls Damn had another advantage. Bitcoin miners are 0:15:22.680 --> 0:15:26.320 coming up for increasing criticism for burning through massive amounts 0:15:26.320 --> 0:15:28.560 of energy just as the world is trying to fight 0:15:28.600 --> 0:15:33.720 climate change. But hydro electricity doesn't create carbon emissions, and 0:15:33.800 --> 0:15:38.760 this power literally had no other use. Now, all Kevin 0:15:38.760 --> 0:15:41.000 had to do was figure out how to get hundreds 0:15:41.040 --> 0:15:44.880 and eventually thousands of computers from China, along with heavy 0:15:44.880 --> 0:15:47.720 equipment to power them all the way to Ocean Falls. 0:15:48.840 --> 0:15:50.600 We brought them in Vancouver and then we trucked them 0:15:50.640 --> 0:15:53.040 up from there. There's a truck road somewhere if you 0:15:53.080 --> 0:15:56.280 need it. No, there's no road into Ocean Falls. Uh um, 0:15:56.560 --> 0:15:58.840 you can come in on the on the ferry, which 0:15:58.880 --> 0:16:01.680 is what we did. It's kind of a full day things. 0:16:01.800 --> 0:16:04.080 As I mentioned, before you know. We loaded them on 0:16:04.400 --> 0:16:07.280 the truck at the airport and then set the operation 0:16:07.400 --> 0:16:09.600 up in an old paper mill that had been falling 0:16:09.640 --> 0:16:14.360 apart for decades. But he did it. Finally, this July, 0:16:14.960 --> 0:16:20.720 Kevin flipped on the first few servers. Kevin's bitcoin mine 0:16:20.720 --> 0:16:23.960 has been reverberating through Ocean Falls ever since Kevin first 0:16:24.000 --> 0:16:26.200 came to town, and not just because you can hear 0:16:26.240 --> 0:16:28.520 the humming of the fans far away from the building. 0:16:29.000 --> 0:16:31.640 I kind of assumed the cryptocurrency boom would have passed 0:16:31.640 --> 0:16:36.120 Ocean Falls by completely, but that wasn't really true. One day, 0:16:36.200 --> 0:16:38.760 Kevin and I visited one of the only public businesses 0:16:38.880 --> 0:16:42.880 in town. It's a local bar. It's open every Monday, Wednesday, 0:16:42.920 --> 0:16:46.480 and Friday from four pm. The seven pm gets packed, 0:16:46.960 --> 0:16:48.400 and the guy sitting next to me said he had 0:16:48.440 --> 0:16:51.760 a friend who was mining cryptocurrencies in Asia. Still, a 0:16:51.800 --> 0:16:55.520 lot of people didn't really seem to know what it was. Yeah, 0:16:56.160 --> 0:17:00.120 even like my granddaughters understand it. Yeah, not me. Know. 0:17:00.360 --> 0:17:04.520 It's a new technology. Yeah, and as you get older, 0:17:04.560 --> 0:17:06.879 you don't at least I don't pick up on it 0:17:06.960 --> 0:17:09.000 very fast. Well, I mean you gotta, it's gonna be 0:17:09.040 --> 0:17:11.560 something you're interested into yeah, like right now, especially now, 0:17:11.560 --> 0:17:13.199 because it's very techy right now. It's just like the 0:17:13.240 --> 0:17:15.679 Internet was in the early nineties. It was there, but 0:17:15.720 --> 0:17:19.000 it was really techy, you know it six I took 0:17:19.080 --> 0:17:21.879 computer programming, yeah, all right on, so I was like, 0:17:22.240 --> 0:17:26.359 uh like fortran kind of stuff for right for now, 0:17:26.520 --> 0:17:29.320 many residents are hopeful that the bitcoin mine will help 0:17:29.400 --> 0:17:33.240 turn things around. Kevin's construction work did provide a handful 0:17:33.280 --> 0:17:35.639 of jobs, but those went to crews that came in 0:17:35.680 --> 0:17:38.600 on boats from the Vancouver area. That's been good for Tony, 0:17:38.760 --> 0:17:41.399 the woman who runs the boarding house, but she framed 0:17:41.480 --> 0:17:45.639 the main impact as more psychological than economic. It always 0:17:45.680 --> 0:17:50.280 puts that air of positivity in in into the mix, 0:17:50.760 --> 0:17:53.200 and that makes a big difference. We have a very 0:17:53.240 --> 0:17:57.600 aging population here, and when I say aging, I mean 0:17:57.760 --> 0:18:01.639 seventy and and up. So there's not a lot of energy, 0:18:02.280 --> 0:18:07.000 not a lot of enthusiasm for anything new, to tell 0:18:07.000 --> 0:18:10.720 you the truth, So I just would like to attract 0:18:10.720 --> 0:18:13.879 some younger people to come in. There is a post 0:18:13.880 --> 0:18:16.960 office and a government run ferry stop in town, but 0:18:17.080 --> 0:18:20.040 Ocean Falls doesn't have enough people to support any private 0:18:20.040 --> 0:18:23.360 businesses except for the bar. Really if you can believe it. 0:18:23.480 --> 0:18:26.760 There isn't even a grocery store in Ocean Falls right now. 0:18:26.760 --> 0:18:30.680 We're barging in all of our groceries from Port Hardy. 0:18:30.800 --> 0:18:35.000 It's a two week process to get from time you 0:18:35.080 --> 0:18:37.040 order your groceries to the time you get them here. 0:18:37.880 --> 0:18:41.440 Kevin's business isn't changing that for now. It's too small. 0:18:42.080 --> 0:18:44.320 He's currently using under a mega watt of power at 0:18:44.320 --> 0:18:47.760 Ocean Falls. Big bitcoin mining operations are measured in the 0:18:47.800 --> 0:18:51.280 dozens or hundreds of mega watts. But even if Kevin's 0:18:51.280 --> 0:18:54.320 business does take off and gets bigger, it's not clear 0:18:54.359 --> 0:18:57.119 that it's impact on Ocean Falls will grow. He is 0:18:57.160 --> 0:19:02.000 tony again. If Ocean Falls become in the meantime more 0:19:02.040 --> 0:19:05.359 recognizable to outsiders who see it as a place to 0:19:05.400 --> 0:19:09.399 come that's viable, it may be just that springboard that 0:19:09.480 --> 0:19:12.960 they need, you know, to come in, and and it 0:19:13.040 --> 0:19:17.480 can perpetuate after that. So do I see blockchain is 0:19:17.560 --> 0:19:21.440 being the I think once it's up and running, it's 0:19:21.440 --> 0:19:23.560 probably not going to have a lot of people that 0:19:23.640 --> 0:19:28.600 are needed. They haven't said, but I don't know how 0:19:28.600 --> 0:19:31.359 many people does it take to keep a bunch of 0:19:31.400 --> 0:19:35.359 computers running? Probably not more than just a couple, and 0:19:35.359 --> 0:19:37.320 maybe they don't even have to be here full time. 0:19:38.080 --> 0:19:41.000 This is something of a pattern. Governments and other places 0:19:41.040 --> 0:19:43.800 that have attracted attention from bitcoin mine is have been 0:19:43.840 --> 0:19:46.800 frustrated once they realize how little chance there is for 0:19:46.880 --> 0:19:52.119 anything resembling real economic development. This isn't just a bitcoin problem. 0:19:52.160 --> 0:19:55.240 A bitcoin mine is basically just a data center, and 0:19:55.320 --> 0:19:58.560 companies that run data centers for other purposes have also 0:19:58.640 --> 0:20:01.359 offered mixed benefits for the out of the way locations 0:20:01.359 --> 0:20:04.040 they've set up. In another version of the story have 0:20:04.160 --> 0:20:07.200 been the places where a defunct shopping mall, let's say, 0:20:07.280 --> 0:20:10.280 will be filled with computer service and buildings that used 0:20:10.280 --> 0:20:13.240 to house dozens or hundreds of retail jobs have become 0:20:13.280 --> 0:20:17.280 places where wealth is generated for people living elsewhere, while 0:20:17.320 --> 0:20:21.399 offering basically no employment opportunities for the locals. Now, to 0:20:21.440 --> 0:20:23.920 be fair to Kevin, he didn't promise to create lots 0:20:23.920 --> 0:20:27.879 of local jobs, but he did have plans to expand. Yeah, 0:20:27.920 --> 0:20:29.679 he said he wanted to grow the size of his 0:20:29.760 --> 0:20:33.200 existing mind and even to get into other types of businesses, 0:20:34.040 --> 0:20:36.400 like he wants to use the heat from the computers 0:20:36.440 --> 0:20:39.159 to warm up the water and the fish hatchery or 0:20:39.280 --> 0:20:42.680 to develop novel technology for cooling computer servers that he 0:20:42.720 --> 0:20:46.600 could presumably sell to other businesses. He's also talked about 0:20:46.680 --> 0:20:49.280 using the paper mill as a kind of working retreat 0:20:49.359 --> 0:20:53.320 for coders working on cryptocurrency projects, and now that might 0:20:53.320 --> 0:20:55.399 be pleasant, but it's not clear how likely it is 0:20:55.440 --> 0:20:58.240 to happen. Some of these ideas might work out and 0:20:58.280 --> 0:21:01.280 bring new life to ocean falls, but Kevin's got lots 0:21:01.280 --> 0:21:07.440 to worry about before then, throughout there was this incredible 0:21:07.480 --> 0:21:10.840 run up in the price of bitcoin. It surpassed nineteen 0:21:11.000 --> 0:21:14.240 thousand dollars at the end of last year. This year 0:21:14.440 --> 0:21:20.399 has been brutal, though. The cryptocurrency is now sinking below 0:21:20.480 --> 0:21:23.359 eight thousand and down more than six percent in the 0:21:23.440 --> 0:21:27.879 last week, and it's getting technical analysts spooked that maybe 0:21:27.920 --> 0:21:30.600 bitcoin has further to fall than we've even seen this week, 0:21:30.840 --> 0:21:32.639 or people are gonna become very fearful and you're going 0:21:32.680 --> 0:21:35.480 to see even further liquidation as people begin to understand 0:21:35.600 --> 0:21:38.679 that the bloom is off the rose. As of this taping, 0:21:38.800 --> 0:21:42.200 the price of bitcoin is around six thousand, four hundred dollars. 0:21:42.680 --> 0:21:45.760 Last year, a handful of bitcoin mining companies had raised 0:21:45.760 --> 0:21:49.840 money by going public on Canada's junior stock exchanges, Ocean 0:21:49.840 --> 0:21:53.159 Falls Blockchain had plans to do the same thing, and 0:21:53.240 --> 0:21:56.920 that presentation that Kevin showed investors in February, it based 0:21:56.960 --> 0:22:00.920 its financial projections on bitcoin being worth eleven thousand dollars 0:22:01.520 --> 0:22:03.600 back in April, when the price had fallen to about 0:22:05.119 --> 0:22:07.480 I asked Kevin whether he was worried at the time. 0:22:07.480 --> 0:22:09.880 He shrugged it off. You know, like Warren Buffet doesn't 0:22:09.880 --> 0:22:12.920 look at stock traces every day. You know, he looks 0:22:12.960 --> 0:22:16.600 at the long term sort of picture of where potential 0:22:16.640 --> 0:22:19.160 for companies. Looking at someone like that as an example, 0:22:19.760 --> 0:22:22.240 you know, he expands his business when you know people 0:22:22.280 --> 0:22:24.640 aren't interested to concerning companies that he sees the longer 0:22:24.720 --> 0:22:28.040 term potential. But it's clear that the price of bitcoin 0:22:28.160 --> 0:22:32.399 has impacted his plans. Kevin's company decided against going public 0:22:32.720 --> 0:22:36.320 because the interest in businesses like his had largely dried up. 0:22:37.520 --> 0:22:39.960 He says this shouldn't be a problem and he'll find 0:22:40.000 --> 0:22:43.800 money elsewhere as he needs it. But investors know that 0:22:44.040 --> 0:22:46.600 there's a point at which it would become unprofitable to 0:22:46.680 --> 0:22:50.240 keep mining bitcoin. Mosaic, a research firm focused on the 0:22:50.240 --> 0:22:54.320