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Iceland Economy

For the first time ever, crypto currency mining within one nation has overtaken the productive use of electricity. Iceland, the data center capital of the world is now leading the way when it comes to cryptocurrency mining and according to Johann Snorri Sigurbergsson, an employee of the energy company HS Orka, Icelandic cryptocurrency mining is likely to double its energy consumption to about 100 megawatts in 2018. According to Iceland’s national energy authority, that is more than households use in the nation of 340,000 people.

So why is Iceland so popular? Iceland’s location at the northernmost tip of the Mid-Atlantic Ridge and its 30 active volcanoes, provide the island with a constant supply of cheap and renewable energy. Geothermal and hydroelectric plants cover a large expanse of the island, driving down the wholesale cost of power, which in turn allows cryptocurrency miners to make higher profits.

Cryptocurrency miners run their computers 24 hours a day and 365 days a year, so the arctic air reduces the need to invest in expensive air conditioning for their server rooms. This is crucial to the mining process, as the specialised chips used to mine most cryptocurrencies produce a lot of heat when run at their maximum capacity.

Asia currently leads the way in mining, but with countries like China reportedly considering limiting cryptocurrency mining following concerns over excessive electricity consumption, cryptocurrency companies are now looking further afield for alternative mining locations. The Wall Street Journal recently reported that the small town of Wenatchee in Washington (USA) has also become a hub for cryptocurrency miners and for the same reason, their relatively inexpensive hydropower.

So where will mining go, you ask? Wherever there is cheap electricity…

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