Bitcoin isn’t really a coin, but for some people, it’s real money in the bank.
It’s a dystopian nightmare for some, an obvious solution to a long-term problem for others: a decommissioned coal-fired power plant, kick-started and brought back online (partly) to mine cryptocurrency.
That’s the stated plan of two companies: IOT Group and Hunter Energy. IOT Group is the cryptocurrency company, with a background in selling “selfie” drones. It wants to build a “Blockchain Application Centre” and connect directly to Redbank, a decommissioned Australian coal-fired power station, to deliver wholesale energy to blockchain companies.
Hunter Energy is the company that wants to kick-start that power station in the first quarter of 2019. The facility has lain dormant since it was closed back in October 2014.
The only issue: Some involved in the project have a long history of legal trouble. Many believe the project won’t actually come to fruition.
On Monday, IOT Group made an announcement on the Australian Securities Exchange: “IOT to be the first in Australia to offer pre-Grid cost effective power prices to Blockchain operators.”
The plan: work alongside Hunter Energy, selling energy at a wholesale price to those who need it for blockchain projects.
Why? The answer’s relatively simple. Mining for digital currency (particularly bitcoin) is challenging. It requires a huge energy expenditure, and in Australia the cost of that energy can outweigh the financial benefits of mining. If it was possible to deliver cheap energy to cryptocurrency miners, it could be more profitable. That might encourage emerging blockchain companies to set up shop in a Blockchain Application Centre next to a power plant eager to sell energy at wholesale prices.
There’s been huge interest lately in bitcoin, an electronic alternative to government-issued money, not least of all for its get-rich-quick allure. But as its value has soared — and plunged — it’s sometimes been hard to separate the sensible from the scams among the 1,500 other cryptocurrencies. Blockchain, the technology that underlies cryptocurrencies, is a decentralized and encrypted way of recording transactions, synchronizing that activity and distributing the record of it across potentially thousands of computers.
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IOT Group’s CEO, Sean Neylon, believes the proposed blockchain center represents a unique opportunity for the Hunter Valley in NSW, where the Redbank power plant is located.
“It offers the potential to create a new Silicon Valley in Australia,” said Neylon.
Here’s the thing: IOT Group is a company with problems, burdened with a history of cash flow issues and alleged corruption.
IOT Group joined the Australian Securities Exchange (ASX) in January 2016 and made waves as Australia’s first internet-of-things company. Back then it was a company with aspirations to take on Apple and Samsung. It sold smartwatches, “selfie” drones and distributed IPTV through a subsidiary brand called “Intervision.”
But where IOT went, legal trouble followed.
In September 2016, IOT Group co-founder Simon Kantor was fired as the executive director of IOT after being accused of selling another company he co-founded, ROAM Systems, to IOT Group without permission from other shareholders. The issue was settled out of court. Kantor passed away in November 2017.
In January 2017, it was alleged that IOT Group had been distributing unlicensed TV content through its IPTV business Intervision. Tony Ishtak, managing director of MySat, took legal action against IOT Group. He claims those legal issues were never resolved.
In October 2017, IOT Group found itself in more trouble.
Can a coal-fired power plant help provide energy for bitcoin miners?
In September 2017, IOT Group reported a negative