Iceland Could Use More Energy Mining Bitcoin Than Powering Homes in 2018

Iceland is expected to use more energy processing Bitcoin transactions in 2018 than it uses to power its homes, consuming some 840 gigawatt-hours of electricity related to the cryptocurrency this year, according to the Icelandic energy firm HS Orka, several news outlets reported.

The country has a population of just 340,000 people, but is home to several major data centers that use its abundant renewable hydropower and geothermal energy sources to operate. Bitcoin is “mined” when “computers solve complex mathematical problems — a process that in turn validates transactions between users of the cryptocurrency,” as the BBC explained. Every time a computer solves a problem, it earns a small Bitcoin reward, generating digital revenue for the data centers running the programs.

“What we’re seeing now is…you can almost call it exponential growth, I think, in the [energy] consumption of data centers,” Johann Snorri Sigurbergsson, an HS Orka spokesman, told the BBC. The country is fielding several proposals for new data centers, which could increase Bitcoin-related energy use even more.

Some Icelandic politicians, however, are growing wary of the Bitcoin boom in the country. Smári McCarthy, a member of Parliament from the minority Pirate Party, tweeted that, “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.”