Iceland has become one of the leaders in Bitcoin mining globally due to its inexpensive electrical costs. However, many are starting to wonder if this is actually a blessing or a curse.
In 2014, a massive abandoned airstrip built by the Allied powers during WWII was just three kilometers from the airport. Back then, nobody could have expected this decrepit area would become the hub of an entirely new financial sector.
Major League Miners
Today, that formerly-abandoned strip is now a haven for international companies to mine Bitcoin and other cryptocurrencies. Warehouses dot the landscape where miners are being fired off across the block, never stopping, and using up more electricity than all the homes in Iceland combined.
What sets Iceland apart from other nations, however, is that most of its energy comes from hydroelectric dams and geothermal power plants. However, as the high electrical usage by Bitcoin (BTC) mining does not directly cause carbon emissions, the potential environmental impact has nonetheless raised concerns.
Environmental Problems Persist
Not everything is peachy when it comes to sustainable energy sources like hydroelectric dams. In fact, these dams sink land further underwater and permanently alter rivers and waterfalls.
Geothermal power plants, another source of energy in Iceland, are also being expanded which requires the destruction of one of Europe’s largest wilderness areas in Iceland. Bitcoin mining has arguably only intensified this rush towards producing more and more energy. With China recently announcing it is cracking down on coal-rich regions mining cryptocurrencies en masse, Icelandic authorities expect Bitcoin (BTC) mining to continue to explode in their country.
Johan Sigurbergsson, business development for local energy firm HS Orka, told Al-Jazeera that Bitcoin miners are ‘great customers’ but their ‘computers are always on and running at maximum capacity.’
What used to be like an old-fashioned gold rush, with anyone being able to mine, has reached industrial levels with large corporations investing major capital to mine cryptocurrencies. For those that are critical, Bitcoin mining does not produce jobs and just ends up using a whole lot of electricity. It’s become an industry rather than a collection of small-time miners and hardcore believers.
There is a case to be made that, on average, Bitcoin mining is more sustainable than today’s financial payment systems. In fact, Bitcoin’s energy consumption when compared globally is very minor. For example, the energy used for Bitcoin mining in the past 10 years is equal to that of all cars used in America in only three days. That’s a crazy statistic which should make us think twice about Bitcoin supposedly being overly-wasteful.
Regardless, as mining technology and energy efficiency inevitably improve, the Bitcoin mining problem might someday just be a minor speedbump in its early development. For now, however, there are some valid concerns regarding how it’s affecting small nations like Iceland.
Do you believe Bitcoin mining is far less energy-efficient than it should be? Let us know your thoughts in the comments below.