Bitcoin mining is swallowing up power resources in Iceland

More energy will be used in Iceland to mine Bitcoin than power its homes this year, expert says

This is greater than Icelandic households use according to the national energy authority.

He said: "If all these projects are realised, we won't have enough energy for it".

Johann Snorri Sigurbergsson, business development manager at the energy company Hitaveita Sudurnesja, said he forecasts Iceland's cryptocurrency mining to double the country's energy consumption up to 100 megawatts this year.

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.

Iceland has become one of the most attractive places for virtual currency mining companies to open shop given the island's abundance of renewable energy - geothermal and hydroelectric energy account for nearly 100% of Iceland's electricity production.

Bitcoin mining thrives in Iceland, where energy is cheap, and internet connections use super fast fiber-optic networks.

Bitcoin mining tools, which primarily consist of large computers, servers, and cooling devices, will use around 840 gigawatt hours of electricity this year, Sigurbergsson estimated. If Iceland approved all of the proposed Bitcoin mining projects, there simply wouldn't be enough electricity to supply them all.

Regardless of the potential profits, McCarthy is unsure about what Bitcoin mining can bring to Iceland, AP reported.

The growth of Bitcoin since its inception has led to the need for more bitcoin mining and the demand for more data centers to do the mining.

But many other analysts say the real figure is likely smaller, and several experts recently told The Washington Post that bitcoin - now the world's biggest cryptocurrency - used no more than 0.14 percent of the world's generated electricity, as of last December.

"The value-to-Iceland/value-generated ratio is virtually zero".

"Under normal circumstances, companies that are creating value in Iceland pay a certain amount of tax to the government", Smari McCarthy, a member of Iceland's Pirate Party, told the Associated Press.

In the United States, when mining companies began moving en masse to Washington to take advantage of the state's cheaper electricity, the data infrastructure of one small county became quickly overloaded and now requires an addition of 100 megawatts. "These companies are not doing that, and we might want to ask ourselves whether they should".

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