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Cryptocurrency mining in Iceland despite increasing resistance

One crucial factor in profitable cryptocurrency mining is access to affordable energy. Iceland’s geothermal power plants, combined with the low temperatures for cooling of datacenters, make the country one of the world’s leading locations.

Cryptocurrency

Before entering the hotly contested market of cryptocurrencies, there are a number of aspects to be taken into consideration. Alongside qualified personnel in a socially and economically stable society, access to affordable energy is probably the most important factor for profitably establishing cryptocurrency mining, in spite of the huge energy requirements for computing power. In addition, the specialized chips with which most cryptocurrencies are mined produce huge amounts of heat, which means additional power is required for an effective cooling system. Because of these requirements, Iceland seems at first glance to be the perfect location for profitable investments in cryptocurrency mining. Added to this is the fact that the government of the island nation appears to be striving to further diversify the domestic economy, and the cryptocurrency mining industry, with its relatively low manpower requirements, does not further intensify the acute shortage of labor in Iceland.

Hype in Iceland surrounding cryptocurrency mining

In fact, over the last few years Iceland has seen a great deal of hype involving cryptocurrency mining with the help of its efficient hydropower and geothermal infrastructure, and its energy consumption now even exceeds the total power consumption of all Icelandic households. Yet the popularity of cryptocurrencies is coming up against a growing, particularly ecologically motivated counter-movement. The virtual miners are increasingly seen as an existential threat to Iceland’s largely untouched landscape. The Icelandic government is also taking a cautious role, and there doesn’t seem to have been any agreement on a clear strategy for dealing with this economic phenomenon. Trade in securities using electronic currency, among other things, is thus still prohibited within Iceland, although there is no indication as yet that the ban is likely to be expanded to include mining.

Datacenters as incubators for new technologies

In spite of opposition and some stigmatization, particularly of Bitcoin as a short-lived fad, there is no indication that mining might soon come to an end. Following a relatively weak but enduring recovery in prices since the start of the year, interest has been growing further. This is being increased by a very recent decision by the Chinese government to take action against miners of cryptocurrencies, which makes it likely that a large proportion of these investors will now try to gain a foothold in Iceland. Those in favor in Iceland counter the short-lived fad argument with the argument that the datacenters can also be used as incubators for new technologies. Anyone wanting to invest in cryptocurrency mining would be foolish not to at least consider the Icelandic market.

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