DATE: 13 February, 2018
SNIP: Bitcoin’s price may be down more than 50% from its highs in December, but no one has told Iceland, where the cryptocurrency and its offspring are reshaping the economy.
According to Johann Snorri Sigurbergsson, an employee of the energy company HS Orka, Icelandic cryptocurrency “mining” is likely to double its energy consumption to about 100 megawatts this year. That is more than households use in the nation of 340,000 people, according to the national energy authority.
Mining is the name for the decentralised process that underpins the integrity of most cryptocurrencies. Effectively, a bunch of computers engage in a race to burn through the most electricity possible and, every 10 minutes, one wins a prize of 12.5 bitcoin for the effort – still worth more than $100,000, despite recent falls.
As the price of bitcoin has risen, so too has the amount of electricity that it is economical to use in order to get the rewards. One recent estimate pegged the energy consumption of the entire network as equivalent to that of the Republic of Ireland.
Bitcoin-mining operations are set to overtake domestic residential energy consumption in Iceland later this year, according to a local energy company. As a result, one lawmaker is considering what could or should happen if Iceland continues to expand its role as a major bitcoin-mining hub.
“We are spending tens or maybe hundreds of megawatts on producing something that has no tangible existence and no real use for humans outside the realm of financial speculation,” Smári McCarthy, and Icelandic member of parliament told the AP. “That can’t be good.”