Bitcoin mining boom in Iceland uses huge amounts of power
Iceland is experiencing a boom in bitcoin mining a boom for the economy but also a huge drain on power resources in the country.
Snorri Sigurbergsson, an employee of the energy company HS Orka, claims the consumption of energy by cryptocurrency miners is likely to double to 100 megawatts this year. This is greater than Icelandic households use according to the national energy authority. There are 340,000 people in Iceland. Bitcoin mining Bitcoin mining is explained in the appended video. The Investopedia explains:
Bitcoin mining is the process by which transactions are verified and added to the public ledger, known as the block chain, and also the means through which new bitcoin are released. Anyone with access to the internet and suitable hardware can participate in mining. The mining process involves compiling recent transactions into blocks and trying to solve a computationally difficult puzzle. The participant who first solves the puzzle gets to place the next block on the block chain and claim the rewards. The rewards, which incentivize mining, are both the transaction fees associated with the transactions compiled in the block as well as newly released bitcoin.Every ten minutes a miner wins a price of 12.5 bitcoins, still worth over a hundred thousand dollars in spite of a huge decline of more than half of bitcoin’s value. Mining has now consumed power to the extent that the entire network consumption is said to be equivalent to that of the Republic of Ireland. In Iceland power consumption by mining has overtaken its other productive uses. The reason is simple. Iceland has a great deal of energy with geothermal and electric plants around the island that is has many volcanoes. Miners look worldwide for cheap and plentiful sources of power. The arctic air cools the server rooms instead of expensive air-conditioning as the chips used to mine produce huge amounts of heat. For now mining facilities are increasing power consumption fast in Iceland Sigurbergsson said that for now there is exponential growth in energy consumption by mining centers. He does not see this stopping at present. He claims that he is getting many calls from investors wanting to build centers in Iceland. However, there are doubters as to the value to Iceland of the increased mining activity. Smari McCarthy an MP from the Pirate Party said: “Cryptocurrency mining requires almost no staff, very little in capital investments, and mostly leaves no taxes either. The value to Iceland… is virtually zero.”