Iceland has joined Québec, Canada as one of the world's top locations for new energy-hungry cryptocurrency mining server farms. Like Québec, Iceland has abundant cheap hydroelectricity and a cool climate. The difference is that Iceland may run short of electricity if the growth of cryptocurrency mining continues to accelerate. In fact, as Iceland continues to attract large scale cryptocurrency mining operations, cyptomining has now outstriped Iceland’s own private energy consumption, and Iceland’s energy producers fear that they won’t be able to keep up with the rising demand.
What is happening in places with cheap energy and a cool climate is something economists describe as a 21st century gold-rush equivalent. But now there is a growing concern that Iceland may have to slow down approval of new cryptomine permitting amid an increasingly stretched electricity generation capacity.
Iceland abundance of cheap hydroelectric energy and cool air brought in The Moonlite Project (https://www.moonlite.io), an industrial scale cryptocurrency mining operation. Its thousands of processors are scheduled to go online in August, using low-cost hydro energy to power its processors and Iceland’s naturally cool air to reduce the size of necessary cooling infrastructure to mine Bitcoin, Bitcoin Cash, and Litecoin. Moonlite will draw 15 megawatts of continuous hydroelectric power to mine $8 million per month in cryptocurrency.
Half of a typical cryptomine's costs come down to the cost of the electricity needed for raw computational power needed to solve "consensus algorithm" puzzles to earn Bitcoins and other cryptocoins, plus the air conditioning and ventilation needed to remove the heat generated from the processors doing the computations. The latest GPU mining rigs pull 1000 watts each before even adding in the external cooling infrastructure costs.
There was a concerted effort started in Iceland five years ago aimed at attracting data center placements into the island nation of 340,000. But now, with cryptomining startups flooding Iceland with requests to open new data centers, Iceland’s government and energy producers are reconsidering the wisdom of this policy and will likely soon end it.
By: BGN Editorial Staff