Bitcoin Mining May Cause Energy Shortage In Iceland

Energy shortages

While the Nordic island nation has become a hotbed for Bitcoin mining in recent months, a serious problem has emerged in Iceland: there now may be energy shortages for powering its households.

The process of mining Bitcoin is an energy-intensive endeavor. According to reports; a single transaction uses the same amount of energy as the average U.S. household in a week.

With an influx of miners looking to take advantage of Iceland’s electricity infrastructure, climate, and lenient regulations, the amount of energy consumed in these mining operations is unsurprisingly unprecedented for a nation that only houses 340,000 people.

In fact, the energy consumed in mining has already surpassed Icelanders’ own private consumption, and a nationwide energy shortage is imminent as producers are struggling to keep up with the rising demand.

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The severity of this energy shortage is set to get bigger as more and more companies around the world want to get in on the action — often described as “the gold rush of the 21st century”.

In an interview with The Washington Post, Johann Snorri Sigurbergsson, a spokesman for Icelandic energy producer HS Orka, said:

“There was a lot of talk about data centers in Iceland about five years ago, but it was a slow start. But six months ago, interest suddenly began to spike. And over the last three months, we have received about one call per day from foreign companies interested in setting up projects here.”

In a separate interview with BBC, Sigurbergsson added:

“If all these projects are realized, we won’t have enough energy for it.”

>>Cryptocurrency Mining Will Leave Iceland Without Power

Iceland was regarded as a prime destination for Bitcoin mining operations because of its cheap and reliable energy sources, its cold climate for cooling down computer servers during the mining process, as well as the local government’s welcoming stance.

However, the Icelandic government probably never expected the Bitcoin mania to get so hot that it could even cause an energy supply “meltdown” within the nation.

For now, the only tangible solution appears to be for the government to hit the ‘control’ button before households lose their power as well.

Featured Image: Depositphotos/© SectoR_2010

In addition to writing financial content and analysis, Jackson has worked as a business journalist at Stockwatch and research analyst at various organizations. He obtained his MA Economics from Concordia University in Montreal and BA Economics from the University of British Columbia, with special emphasis on environmental and industrial economics.
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