Bitcoin Mining in Iceland Will Soon Use More Energy Than Homes

Bitcoin Mining Tax

Iceland, with a population of just 340,000 people, is seeing this problem firsthand, according to the BBC.

Johann Snorri Sigurbergsson, a spokesman for Icelandic energy firm HS Orka, said there were a number of potential customers keen to join the country's growing ranks of cryptocurrency miners.

Bitcoin is "mined" when "computers solve complex mathematical problems - a process that in turn validates transactions between users of the cryptocurrency", as the BBC explained.

Nearly all of Iceland's energy comes from renewable sources and a number of large virtual currency companies have started establishing bases for the energy-sapping task of mining cryptocurrencies. 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.

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.

"I don't see it stopping quite yet", added Mr Sigurbergsson, referring to data centre projects.

He added that there is such an abundance of data centre proposals that giving all of them the green light would be impossible. If Iceland approved all of the proposed Bitcoin mining projects, there simply wouldn't be enough electricity to supply them all.

"The value to Iceland.is virtually zero". As the mining companies have been developing in the North Atlantic island, Smari McCarthy, a lawmaker from Iceland's Pirate Party, has come up with an idea to tax the profits of bitcoin mines.

But many other analysts say the real figure is likely smaller, and several experts recently told The Washington Post that bitcoin - now the world's biggest cryptocurrency - used no more than 0.14 percent of the world's generated electricity, as of last December.

Bitcoin mining company Genesis Minining's manager Helmut Rauth, however, takes an unsurprisingly different viewpoint, claiming that, "What we are doing here is like gold mining".

But as crypto-currencies rise in popularity, mining operations certainly continue to use more and more resources - recent analysis of European energy use in 2017 by campaign group Sandbag noted that Bitcoin mining was contributing to additional power demand in the technology sector.

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