Power consumption from servers used to mine Bitcoin and other cryptocurrencies is set to overtake domestic power usage in Iceland this year as miners relocate from Asia to take advantage of the country's low fixed costs for electricity.
However, Icelandic energy company HS Orka has admitted that it may not be able to generate enough electricity in order to satisfy demand.
It comes as a clampdown in China, in particular, on cryptocurrency mining causes an exodus from the country, with Iceland an attractive location because its geothermal power sources enable Icelandic power companies to offer data centres low fixed energy prices on decades-long contracts.
On top of that, people in Iceland have also been keen to take advantage of their low power bills to mine cryptocurrencies as well.
Cryptocurrency mining requires almost no staff, very little in capital investments, and mostly leaves no taxes either. The value to Iceland / value generated ratio is virtually zero. Closer to zero the higher the value of cryptocurrencies.— Smári McCarthy (@smarimc) February 12, 2018
Bitcoin mining operations alone are expected to use around 840 gigawatt hours of electricity this year to power both servers and cooling systems in data centres in Iceland, according to HS Orka director of business development Johann Snorri Sigurbergsson, speaking to the BBC.
The low cost of electricity is the reason why the country has three aluminium smelters. However, not everyone is happy about the sudden rise of cryptocurrency mining in Iceland. Pirate Party member of parliament Smari McCarthy described "the value to Iceland" of cryptocurrency as "virtually zero".
Always, always, always, my primary goal is to move society forward in fruitful ways. I definitely don't want to end up as the bad guy in the eyes of the cryptocurrency community. On the contrary, I want to work with you guys to strengthen this innovation.— Smári McCarthy (@smarimc) February 12, 2018
He tweeted: "Cryptocurrency mining requires almost no staff, very little in capital investments, and mostly leaves no taxes either. The value to Iceland/value generated ratio is virtually zero. Closer to zero, the higher the value of cryptocurrencies."
However, he later "clarified" that he hadn't intended to attack the cryptocurrency industry and, rather, wanted to see Icelandic authorities work with it.
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