Hitaveita Sudurnesja is a Svartsengi-based geothermal energy plant (about four km north of Grindavík) which powers southwestern Iceland. According to reports, the area has become a hotbed for cryptocurrency mining which is increasing its usage of power to eventually exceed the power consumption of its citizens. The energy consumption is doubled to around 100 megawatts this year. The National Energy Authority puts its usage at more than 340,000 households on the island.
Johann Snorri Sigurbergsson, Hitaveita Sudurnesja’s business development manager said ,”The trend of bitcoin mining in the country seemed out of bounds four months ago, but then the price of bitcoin soared and that resulted in lot of buyers for power. In fact just today, I came from a meeting with a mining company seeking to buy 18 megawatts.”
Mining for bitcoin has become a lucrative business due to its concept of baked-in digital scarcity coupled with solving computational problems associated with mining the blocks and confirming transactions on the blockchain to produce new bitcoins. This makes mining a key affair in the entire operation of bitcoin.
To achieve maximum results, cooler climes are necessary, as are abundant sources of energy. Iceland has become a natural home for the burgeoning cryptocurrency industry but Pirate Party legislator Smari McCarthy is not fully convinced by the digital currency mining process. She adds, “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.”
She further opines that 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 can’t be good in the long run. Interestingly, The Pirate Party was once known to favour bitcoin.