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Are coin mining operations draining Iceland’s batteries?

Are coin mining operations draining Iceland’s batteries?

The meteoric rise of cryptocurrencies over the past few years is probably best explained by the following sentence: soon, coin mining operations in Iceland will be using more energy than the country’s residents for everyday life.

According to a local energy company, mining operations could overtake residential energy consumption soon, and given the competition for coins, there’s talk that it could cause an energy shortage for the 340,000 people that live on the North Atlantic.

Described by many is this century’s goldrush, bitcoin mining has already caused energy worries in China, with many mining operations moving due to increased regulatory control and restrictions – Iceland was one of the countries many miners decided upon when shifting locations.

“There was a lot of talk about data centers in Iceland about five years ago, but it was a slow start,” Johann Snorri Sigurbergsson, a spokesman for Icelandic energy producer HS Orka, told The Washington Post. “But six months ago, interest suddenly began to spike. And over the last three months, we have received about one call per day from foreign companies interested in setting up projects here,” he explained.

Bitcoin has seen a rapid drop in price since it reached an all-time high at the tail end of 2017. But that hasn’t – and won’t – stop miners who stand to receive highly lucrative rewards for the power-hungry grunt-work their servers are subjected to. Another key problem for Iceland, aside from the sheer consumption, is the value back, which currently stands at zero. With no tax coming back into the country, it’s difficult to see how authorities won’t clamp down on high scale energy usage, which could hurt local businesses.

“What we’re seeing now is… you can almost call it exponential growth, I think, in the [energy] consumption of data centres,” added Sigurbergsson to the BBC. “I’m getting a lot of calls, visits from potential investors or companies wanting to build data centres in Iceland.”

“If all these projects are realized, we won’t have enough energy for it.”