Crypto mining companies to consume more energy than households in Iceland

Crypto mining companies to consume more energy than households in Iceland

Johann Snorri Sigurbergsson, a spokesman for Icelandic energy firm HS Ork, notes an "exponential" rise in Bitcoin mining in the country saying that if all the planning mining projects are realized there won't be enough energy for them.

"Four months ago, I could not have predicted this trend - but then bitcoin skyrocketed and we got a lot more emails", he said to the Associated Press at the Svartsengi geothermal energy plant, which is now powering a lot of the bitcoin mining operations going on at the southwestern peninsula of the country.

According to Iceland's National Energy Authority, bitcoin mining is expected to double Iceland's energy consumption to around 100 megawatts this year, which is more than households on the island nation of 340,000 use, Metro News reported on Sunday. Almost 100% of energy in Iceland reportedly comes from renewable sources.

Data centres that are mining bitcoin receive small rewards when the programs they run solve complex mathematical problems, generating revenue.

Bitcoin mining thrives in Iceland, where energy is cheap, and internet connections use super fast fiber-optic networks.

"What we're seeing now is. you can nearly call it exponential growth, I think, in the [energy] consumption of data centers", Sigurbergsson told the BBC.

Another advantage of Bitcoin mining in Iceland is the cool climate, which provides natural cooling for the large computer servers used in the data centers.

"I don't see it stopping quite yet".

According to experts, there are no grounds to predict any decline of interest of foreign companies in establishing their data centres in Iceland.

Inorder to make bitcoins, one needs enormous amounts of energy to run their PCs and mine the bitcoins.

That could cause problems, though, as officials warn they won't have sufficient energy to supply the number of proposed Bitcoin mining centers (if those facilities do indeed open).

An Icelandic lawmaker has suggested imposing a new tax on bitcoin mining companies. "The economics of bitcoin mining mean that most miners need access to reliable and very cheap power on the order of 2 or 3 cents per kilowatt hour".

Under normal circumstances, companies that are creating value in Iceland pay a certain amount of tax to the government.

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