If you’ve ever had thoughts or questions about Iceland, it might seem plausible to think most of its energy is used to keep the heat running high. But recently, bitcoin mining has been growing so fast in the Arctic country that it’s ready to take the first-place position.
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Iceland and Bitcoin: The Perfect Match?
In fact, bitcoin mining has become so popular in the past few years that the energy it consumes is on the verge of overshadowing the energy required to power all of Iceland’s residences. That’s a lot of energy for a small nation with a total population just under 350,000.
Johann Snorri Sigurbergsson, manager at energy firm Hitaveita Sudurnesia, believes bitcoin mining could hit as many as 100 megawatts this year.
“Four months ago, I could not have predicted this trend. But then bitcoin skyrocketed, and we got a lot more emails. Just today, I came from a meeting with a mining company seeking to buy 18 megawatts.”
Fears of an Energy Crisis
Despite several boosts in business and potentially to Iceland’s economy, not everyone is smiling. Some are predicting the country could soon enter an energy crisis if “mining fever” doesn’t calm down soon.
Smari McCarthy is one of those concerned. As a serving member of Iceland’s parliament, McCarthy was elected to the Althing in 2016 following years of digital activism and working in Iceland’s newfound Pirate Party.
While he has nothing against bitcoin, he doesn’t see the value it brings to Iceland’s future, particularly because bitcoin firms within the country are faced with almost no taxation policies. This is simply a case of money going out, but never coming back in.
“We are spending tens or maybe hundreds of megawatts on producing something that has no tangible existence and no real use for humans outside the realm of financial speculation,” he recently stated.
“That can’t be good. Cryptocurrency mining requires almost no staff, very little in capital investments, and mostly leaves no taxes… The value to Iceland/value-generated ratio is virtually zero – closer to zero the higher the value of cryptocurrencies.”
He also expressed concern over the risks bitcoin could present to Iceland’s traditional banking institutions and to its environmental front. The amount of energy bitcoin mining uses, he believes, could potentially lead to some nasty repercussions for Iceland’s already fragile landscapes and general atmosphere.
Nothing to Worry About?
Others, however, feel these hazards are relatively minimal. Operations manager at Genesis Mining Helmut Rauth, for example, feels it is unfair when bitcoin is “singled out” as being “environmentally taxing.”
He said that while computing power will always demand energy, the amounts used by bitcoin mining operations aren’t any larger than those required to complete credit card transactions or even Internet research.
“Cryptocurrencies have the same global impact,” Rauth stated confidently. “What we are doing here is like gold mining. We are mining on a large scale and getting the gold out to the people.”
Genesis Mining moved from Germany to Iceland four years ago when bitcoin experienced its first major price bump from $350 USD to just over $1,000.
Is Iceland on the right path by putting so much emphasis on bitcoin mining? Post your comments below.
Images via Pixabay