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Main share of Iceland’s energy consumption will come from cryptocurrency mining this year

According to Snorri Sigurbergsson, the business development manager at the energy company Hitavetia Sudurnesla, the cryptocurrency mining intensiveness will double this year in Iceland, and so will the related energy consumption. The latter is expected to reach the rate of around 100 megawatts in 2018, thus exceeding the total household electricity use in the country, as the statistical data provided by the Iceland’s National Energy Authority reveal.

In recent months, many large companies specializing in mining virtual currencies have been placing their mining farms in Iceland.

‘Four months ago, I could not have predicted this trend – but then bitcoin skyrocketed and we got a lot more emails,’ Mr. Sigurbergsson said when being interviewed at the Svartsengi geothermal energy plant, the main energy supplier of the southwestern peninsula where the mining takes place.

‘Just today, I came from a meeting with a mining company seeking to buy 18 megawatts,’ he added.

Iceland is widely regarded as one of the best countries for cryptocurrency mining. This is mostly due to considerable number of power plants, both geothermal and hydroelectric ones, operating in the country. Another important factor owes largely to the country’s northern latitude, as the cold climate provides natural cooling to computer servers involved in mining.

In response to growing demand for energy produced in Iceland, Smari McCarthy, the lawmaker for Iceland’s direct democracy-oriented Pirate Party, suggested imposing taxation on cryptocurrency mining.

‘Under normal circumstances, companies that are creating value in Iceland pay a certain amount of tax to the government. These companies are not doing that and we might want to ask ourselves whether they should,’ – he stated.

The politician has also voiced some doubts concerning the general beneficence of the growing industry for the country’s economy.

‘We are spending tens or maybe hundreds of megawatts on producing something that has no tangible existence and no real use for humans outside the realm of financial speculation. That can’t be good,’ – he said.

More than 16 000 000 of a total of 21 000 000 of bitcoins have already been mined since the first cryptocurrency hit the market in January 2009. Ever increasing complexity of calculations needed for mining new bitcoins presupposes that more and more powerful computer devices are used for these purposes. This, in turn, predetermines the increase of related energy consumption.