Apart from being a country where you can often see the “Northern lights”, and the country of origin of the actor known as the Mount of Play on the thrones, Iceland is also the perfect base for digging crypto-currents.
But why is that so? Iceland is not known for being a hub of startups or for huge investments in the technology sector. However, its geographical location (in the mid-Atlantic) is the number one reason why crypto-companies are making efforts to expand their business in this Scandinavian pearl.
Although the price of Bitcoin and other crypto-currencies has been in a floating state in the last few months (the current value is around 7,000 dollars), the crypto-currency market is on a steady pace. More and more companies are working with trading and digging crypto-currencies. And as the market grows, the demand for cheap and stable electricity is needed for safe operation with these currencies.
The consumption of electricity for digging crypto-currencies far exceeds the level of total consumption of households in Iceland
Here Iceland enters the story. The abundance of river sources and the cold climate are big factors that reduce the risk of destroying the crypto-currency digging centers. Cold weather contributes to reducing the risk of overheating. In addition, Iceland produces about 80 percent of its energy through hydropower plants and geothermal sources. In comparison, the United States produces only 6 percent using this method.
Therefore, it is clear why Iceland is appealing for this purpose. It is a country that regularly handles temperatures well below zero. The production of electricity is mainly based on naturally renewable sources.
But the economic costs of managing such a center are enormous. An example of this is Genesis’s electricity bills (which moved their operations to Iceland several years ago), with amount to several million euros per month.
In Iceland, the consumption of electricity for digging crypto-currencies far exceeds the level of total consumption of households there. Even there is concern that the country will fail to cope with the growing demand and the number of new companies on the market of crypto-currencies.
Therefore, Iceland is facing a major challenge: they should continue attracting investment companies in their country, while finding ways to meet the growing demand for electricity.
It will be interesting to follow this dynamic of relations, but also the point of view from other countries that are in a similar position with Iceland.