Icelandic Bitcoin Miners Put on a Dry Diet

More Juice for New Bitcoin Miners in Iceland - Source: Pixabay
More Juice for New Bitcoin Miners in Iceland - Source: Pixabay

Power Shed — the existing Icelandic Bitcoin (BTC) miners are suffering. The new ones can end up without power, while the existing miners will have their ratio reduced.

Some time after the start of Bitcoin rush, on January 3, 2009, cryptocurrency enterprises began to relocate to Iceland where the cryptocurrencies can be mined using green energy. Large data centers contributed for approximately 1% of its GDP in 2016, with bitcoin mining operations accounting for 90% of that. The miners currently consume more power than all of Iceland’s homes combined, with Enigma’s electric expenses exceeding $1 million each month.

But, no matter how green the energy is, there is another problem – how to extract minerals without destroying the landscape. According to local experts quoted by The Wall Street Journal, meeting the demand for electricity requires the construction of additional dams and power plants, which might damage Iceland’s unique, delicate ecology.

In recent years, the bitcoin mining sector has risen significantly faster than it has elsewhere. According to the Icelandic Blockchain Foundation, 8% of all Bitcoins have been mined there. Mining entrepreneur Salter says he understands why Icelanders are opposing the damage that their unique nature can get for more electricity capacity.

Due to a lack of electricity in Iceland, the country’s national power provider Landsvirkjun has denided new Bitcoin miners. Landsvirkjun has not responded to new client requests to purchase electricity to mine cryptocurrencies.

Iceland, hot springs. Source: Unsplash

More Juice for New Bitcoin Miners in Iceland

Due to a variety of issues, Landsvirkjun, Iceland’s national power utility, has been obliged to decrease the amount of energy given to bitcoin miners in the southwest and certain businesses. “There could be very little excess energy in 2021 and 2022,” said Hordur Arnarson, CEO at Landsvirkjun. “Because of the climate issues we see a lot of very interesting segments that are growing rapidly, and several of them need electricity.” The hydropower reservoirs are likewise rather low in level. As a result, Landsvirkjun refused any new demand for power from mining businesses from December 7, 2021 on.

Iceland’s inexpensive and plentiful green power attracts bitcoin mining enterprises from around the globe. The country is undoubtedly rich in geothermal energy, and renewable energy accounts for slightly over 99% of Icelandic electrical production.

Hive Blockchain Technologies, Genesis Mining, and Bitfury Holding have built bitcoin mining operations in Iceland. During its initial coin offering (ICO), the Austrian business HydroMiner GmbH raised around $2.8 million to deploy mining equipment in Icelandic power stations.

Green Blockchains: Proof of Stake and Flattering Reporting

As the mining sector comes under growing criticism from environmentalists, Iceland is slamming the door to some miners. Some crypto projects, such as Ethereum (ETH), which is progressively implementing version 2.0, are forsaking proof of mining in favor of proof of stake in order to lower their blockchain’s energy usage and carbon imprint.

Others use transparency to show their willingness to become environmental advocates. Tezos (XTZ) just released a research suggesting a 70% increase in the energy efficiency of every transaction on its blockchain.

Solana (SOL) has also given data to back up its aim to become carbon neutral. A network transaction would thus take 24 times less energy than needed to fully charge a battery of an iPhone 13.

Each blockchain wants to show how green they are planning to become. Filecoin’s (FIL) energy consumption may even be seen online through a dashboard.

Statistics are used by cryptocurrency initiatives to improve their image. Even bitcoin, which is frequently named the most polluting cryptocurrency, has benefited from a greening inquiry.

Iceland saying no to new miners due to a lack of energy

Landsvirkjun, Iceland’s largest utility, has been obliged to curtail energy supply to power-hungry industrial clients such as aluminum makers and fish processing factories. Consumers with easy to cancel short-term contracts have also been subject to limitations. Data centers that mine digital currencies are among those affected, and the corporation has started refusing new bitcoin miners.

Unusually high power consumption has also contributed to the gap, according to Tinna Traustadottir, executive vice president of sales and customer service at Landsvirkjun. For decades, Iceland’s massive smelters have been a big user, but an increasing number of cryptocurrency miners, drawn by the island nation’s cheap electricity, are now playing a role as well.

Those news of Iceland’s issues with electricity shortages comes after Sweden and Norway, two other Nordic nations, made concerns about the rising energy requirements and increasing environmental impact of cryptocurrency mining.

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