Bitcoin Mining in Iceland Will Soon Use More Energy Than Homes

In Iceland, bitcoin mining operations are about to take a greater share of the country's energy generation than homes. The country has become a haven for large cryptocurrency mining groups with its abundant supply of renewable energy, to the extent that power demand for bitcoin mining is set to outstrip residential use.

Iceland is a sparsely populated island nation in the North Atlantic, at just 340,000 people. The whole country is almost entirely powered by renewable energy, an abundance gained from Iceland's extensive investments into wind, geothermal and hydroelectric power, as Ars Technica explained.

Pixabay/MichaelWuenschA Bitcoin (virtual currency) shown here as an illustration photo.

Now, more of these energy supplies are going to cryptocurrency mining operations, with enough growth foreseen over this year that it will eventually beat out energy consumption from household use.

Iceland's virtual currency mining operations are now projected to double its power consumption to about 100 megawatts before the year ends, according to Hitaveita Sudurnesja energy business development manager Johann Snorri Sigurbergsson.

"Four months ago, I could not have predicted this trend - but then bitcoin skyrocketed and we got a lot more emails," he said to the Associated Press at the Svartsengi geothermal energy plant, which is now powering a lot of the bitcoin mining operations going on at the southwestern peninsula of the country.

"Just today, I came from a meeting with a mining company seeking to buy 18 megawatts," he added. The resulting investment boom has puzzled the residents of the otherwise sleepy coastal towns of Keflavik, which now hosts some of the bigger international bitcoin and cryptocurrency mining facilities among the homes and ports of the local fishermen.

The rapid growth has prompted Iceland's Pirate Party lawmaker Smari McCarthy to suggest taxing bitcoin and cryptocurrency mining operations in the country if only to add to the coffers of the island nation.

"Under normal circumstances, companies that are creating value in Iceland pay a certain amount of tax to the government," McCarthy explained.