Published: Thu, February 15, 2018
Science | By

Bitcoin mining boom in Iceland uses huge amounts of power

Bitcoin mining boom in Iceland uses huge amounts of power

Bitcoin mining in Iceland may use more electricity than households Iceland's crypto miners are likely to consume more electricity this year than all of the country's homes, according to a local energy firm HS Orka. After China and Canada, Iceland is the following hot area for the huge companies invested into virtual currency mining.

Iceland has a small population, of around 340,000 people.

Increasing general interest in cryptocurrencies such as bitcoin is having a myriad of effects around the globe, but one major aspect is a sudden increase in energy consumption.

"There was a lot of talk about data centers in Iceland about five years ago, but it was a slow start", Johann Snorri Sigurbergsson, a spokesman for Icelandic energy producer HS Orka, told The Washington Post.

"If all these projects are realized, we won't have enough energy for it", Sigurbergsson was quoted as saying.

Mr Sigurbergsson's calculations were first reported by the Associated Press.

In the past few months, the soaring prices of cryptocurrencies, whose algorithms get more and more complicated and energy consuming, have driven many mining facilities to move to Iceland. As a result, transaction involves an enormous number of mathematical calculations, which in turn occupies vast computer server capacity - which requires a lot of electricity.

The growth of Bitcoin since its inception has led to the need for more bitcoin mining and the demand for more data centers to do the mining. With a wealth of hydroelectric and geothermal power plants on this island, organizations are coming here to build up their base.

Bitcoin mining tools, which primarily consist of large computers, servers, and cooling devices, will use around 840 gigawatt hours of electricity this year, Sigurbergsson estimated.

Keflavik, a coastal town on the southern peninsula of Iceland, is home to three of the biggest Bitcoin mining sites in the country. Smári McCarthy, a member of Parliament from the minority Pirate Party, tweeted that, "Cryptocurrency mining requires nearly no staff, very little in capital investments, and mostly leaves no taxes either".

They are the source of the Icelandic bitcoin miners' income - a revenue source many Icelanders are still not quite sure what to make of, especially if the lights start flickering.

"The value to virtually zero".

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