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Cryptocurrency miners set to use more power than consumers in Iceland this year

Cryptocurrency miners set to use more power than consumers in Iceland this year

Low-cost electricity generated via geothermal makes Iceland an attractive place for cryptocurrency miners

Cryptocurrency miners decamping to Iceland are set to use more electricity this year than the domestic population, and it may not be able to ramp up output to satisfy the rapidly rising demand, a local power company has warned. 

The spike in demand comes as miners shift from China and other South-East Asian countries following a crackdown, choosing Iceland for its low-cost electricity, which is almost entirely generated via renewable geothermal power.

Not only that, but data centres enjoy fixed-price power contracts that can last decades. 

However, Icelandic energy company HS Orka has admitted that it may not be able to generate enough electricity in order to satisfy demand.

It comes as a clampdown in China, in particular, on cryptocurrency mining causes an exodus from the country, with Iceland an attractive location because its geothermal power sources enable Icelandic power companies to offer data centres low fixed energy prices on decades-long contracts. 

On top of that, people in Iceland have also been keen to take advantage of their low power bills to mine cryptocurrencies as well.

Bitcoin mining operations alone are expected to use around 840 gigawatt hours of electricity this year to power both servers and cooling systems in data centres in Iceland, according to HS Orka director of business development Johann Snorri Sigurbergsson, speaking to the BBC.

The low cost of electricity is the reason why the country has three aluminium smelters. However, not everyone is happy about the sudden rise of cryptocurrency mining in Iceland. Pirate Party member of parliament Smari McCarthy described “the value to Iceland” of cryptocurrency as “virtually zero”.

He tweeted: “Cryptocurrency mining requires almost no staff, very little in capital investments, and mostly leaves no taxes either. The value to Iceland/value generated ratio is virtually zero. Closer to zero, the higher the value of cryptocurrencies.”

However, he later “clarified” that he hadn’t intended to attack the cryptocurrency industry and, rather, wanted to see Icelandic authorities work with it. 

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