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Bitcoin mining to surpass domestic energy use in Iceland

When Bitcoin started to surge last year and the virtual currency entered the mainstream consciousness, lots of people thought, “Hey, I’ve got a home computer – I think I’ll mine some of that stuff myself.” However, they would have found that it wasn’t quite so simple. Not only would the average home computer struggle to solve the complex equations used in Bitcoin mining in anything like a realistic timeframe, but the huge energy costs involved in running the necessary hardware would also make it cost-ineffective.

This is why specialist Bitcoin-mining companies and cooperatives are the more usual methods of production. They can make use of economies of scale, as well as accessing the most advanced super-computers and data centre technology.

Iceland one of the main centres of Bitcoin mining
Iceland is an attractive site for Bitcoin miners and data centres in general due to its cool climate, relatively cheap renewable energy, and abundance of natural cold water resources that also help with cooling.

The Moonlite Project is a massive project that will see several industrial-scale data centres built to focus entirely on cryptocurrency mining. As well as Bitcoin, it will mine DASH, Litecoin and Ethereum using what the project itself describes as “100% sustainable, green energy.”

It is set to open later this year and will have an initial capacity of 15 megawatts, but it’s not the only such operation that has either already started mining in Iceland or is planning to in the near future.

Johann Snorri Sigurbergsson, a spokesman for Icelandic energy firm HS Orka, told the BBC: "If all these projects are realised, we won't have enough energy for it.”

Sigurbergsson had already said that the energy used by Bitcoin mining operations could surpass that used by all homes in the country during 2018. He estimated that Bitcoin mining would use around 840 gigawatt hours of power to supply data centre computers and cooling systems. This compares to around 700 gigawatt hours used by all homes in the country.

"What we're seeing now is... you can almost call it exponential growth, I think, in the [energy] consumption of data centres. I don't see it stopping quite yet," he said.

"I'm getting a lot of calls, visits from potential investors or companies wanting to build data centres in Iceland."

Mining has “virtually zero” value to the country
Not everyone is happy about the rise of cryptocurrency mining in Iceland.

Icelandic Parliament member Smári McCarthy 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.”

As cryptocurrencies become more popular, the mining operations use more and more resources. The question of power consumed during cryptocurrency mining continues to be a hot topic, with some disputed claims suggesting that the world's total combined Bitcoin mining operations now consume more energy than the Republic of Ireland.

uk.tdsynnex.com

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