Naturally, cold climate and access to renewable energy are mentioned as the main reasons for the influx of crypto-currency companies to the country
Icelandic businessman Johan Snorri Sigurbergsson from the energy company Hitaveita Sudurnesja envisages doubling the energy consumption needed to extract the cryptocurrency this year to 100 megawatts, and more energy than 340,000 Icelanders will be used by him for his own use during this time.
Sigurbergsson told the Associated Press that “he could not predict this trend” four months ago – but that’s when Bitcoin went up. “He adds that he has just met with a mining company that wants to buy 18 megawatts.
Equipment for extracting Bitcoins requires a lot of energy to perform calculations to find “hashes” that Bitcoins then give. Alternative solutions have been proposed in relation to the current extraction method, eg using Proof-of-Stake instead of Proof-of Work or using renewable energy to power mining computers.
Mining areas in Iceland naturally have the potential to produce less pollution than even those located in China, because they have access to geothermal and hydroelectric power plants, cheaper and more environmentally friendly alternatives to coal.
Keflavik, a coastal town on the southern peninsula of Iceland, is the seat of the three largest Bitcoin mining sites in the country.
In the US, when mining companies began to enter Washington in a massive way to take advantage of cheaper electricity, the infrastructure was quickly overloaded and now requires 100 megawatts.
Smari McCarthy from the Icelandic Party of Pirates, an anti-party political party that entered Iceland’s parliament after the 2008 financial disaster, spoke about the possibility of taxing the profits of Bitcoin extraction, given that the mining company falls into the category of “value creation” in the country.
In December 2016, When Iceland was getting ready to create an alternative coalition that included the Pirate Party after the election, the founder of the Pirate Party referred to their platform as the most “favorable” Bitcoin path in the country.