More Power for Cryptomining Than Household Use in Iceland This Year

Easy access to renewable energy and cold climate – these are among the reasons cryptominers choose the island in the Northern Atlantic

by Viko
13 February • 2 min
In Mining

Energy used for cryptocurrencies mining in Iceland is projected to double this year, reaching 100 megawatts, and exceeding household consumption, according to the prognosis of local businessman Johan Sigurbergsson, quoted by the Associated Press.

According to Sigurbergsson, the sharp increase in Bitcoin value is the main reason for this trend, which seemed impossible four months ago.

These huge amounts of power are used by the miners’ hardware to find hashes, which the Blockchain rewards with a bitcoin, experts explain the process. It has been proposed to change the Proof-of-work policy to Proof-of-Stake in order to stop the energy-consumption madness, or simply to power the computers with renewable sources.

While in China cryptomining is associated with power, delivered from the polluting coal-burning mining sites, the process in Iceland is much more nature-friendly. Computers receive the needed electricity via geothermal and hydroelectric power plants, which is also cheaper.

One interesting innovation is the open structure of the biggest farms on the island – in Keflavik, which allows the cold wind to cool down the hardware, cutting expenses on fans.

Icelandic Pirate Party have proposed taxation of any profit, acquired during mining in the country. However, some parliament members like Smari McCarthy are not sure about the profits that Bitcoin may provide. According to him, the country is providing hundreds of megawatts of power for producing something without any value outside the world of speculation.