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Bitcoin Mining In Iceland Consumes More Energy Than Homes

Bitcoin Mining In Iceland Consumes More Energy Than Homes

Bitcoin Mining In Iceland Consumes More Energy Than Homes

 

Bitcoin prices may have plunged in the first months of 2018, but the cryptocurrency craze is still burning bright—and using up a lot of electricity in the process.

Bitcoin mining refers to the work done by computers connected to the global Bitcoin network.

These computers solve complex mathematical problems - a process that in turn validates transactions between users of the cryptocurrency.

The computers that do this validation work receive small Bitcoin rewards for their trouble, making it a lucrative exercise, especially when done at a large scale.

Sudden Rise In Mining Operations

 

Iceland has a small population, of around 340,000 people and nearly 100% of energy in Iceland comes from renewable sources.

Icelandic businessman Johan Snorri Sigurbergsson of the energy company Hitaveita Sudurnesja predicts "What we're seeing now is... you can almost call it exponential growth, I think, in the [energy] consumption of data centres,

He added that he expects Bitcoin mining operations will use around 840 gigawatt hours of electricity to supply data centre computers and cooling systems, for example.

He estimated that the county's homes, in contrast, use around 700 gigawatt hours every year.

"I don't see it stopping quite yet, I'm getting a lot of calls, visits from potential investors or companies wanting to build data centres in Iceland." added Mr Sigurbergsson, referring to data centre projects.

He also said that there are so many proposed data centres that it wouldn't be possible to supply all of them.

He added that his firm was mostly interested in dealing with companies that were willing to commit to long-term contracts of a few years or more. If Iceland took on all of the proposed Bitcoin mining ventures, there simply wouldn't be enough electricity to supply them all, he added.

The crypto-currency mining industry in Iceland was recently given a boost thanks to the launch of The Moonlite Project - a large data centre where various crypto-currencies, including Bitcoin, will be mined.

It is set to open later this year and will have an initial capacity of 15 megawatts, though this is expected to increase in the future. Building out bitcoin-mining operations in Iceland is greener than doing it in China.

Virtual currency miners are flocking to Iceland due to its abundance of renewable energy, and some lawmakers want to tax them, according to ABC News. Iceland’s renewable energy from hydroelectric and geothermal power plants has delivered competitive electricity rates.

Interestingly, cryptocurrency mining is getting big in Russia too, where nuclear scientists are getting their hands on bitcoin mining. Some time back a Russian businessman had bought out old power plants which would be used for crypto mining.

Benefits of Mining For Iceland

 

Smari McCarthy, a member of the Icelandic parliament for the Pirate Party, tweeted: "Cryptocurrency mining requires almost no staff, very little in capital investments, and mostly leaves no taxes either.

"The value to Iceland... is virtually zero."

He also clarified previous reports that quoted him as saying he was keen to tax Bitcoin mining firms.

Always, always, always, my primary goal is to move society forward in fruitful ways. I definitely don't want to end up as the bad guy in the eyes of the cryptocurrency community. On the contrary, I want to work with you guys to strengthen this innovation.

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