Iceland expected to use more energy – mining – bitcoins than it will to power its homes this year – The Denver Postbode

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By Egill Bjarnason, The Associated Press

KEFLAVIK, Iceland – Iceland is expected to use more energy “mining” bitcoins and other virtual currencies this year than it uses to power its homes.

With massive amounts of electric current needed to run the computers that create bitcoins, large virtual currency companies have established a base te the North Atlantic island nation blessed with an abundance of renewable energy.

The fresh industry’s relatively unexpected growth prompted lawmaker Smari McCarthy of Iceland’s Pirate Party to suggest taxing the profits of bitcoin mines. The initiative is likely to be well received by Icelanders, who are skeptical of speculative financial ventures after the country’s catastrophic 2008 banking crash.

“Under normal circumstances, companies that are creating value ter Iceland pay a certain amount of tax to the government,” McCarthy told The Associated Press. “These companies are not doing that, and wij might want to ask ourselves whether they should.”

The energy request has developed because of the soaring cost of producing and collecting virtual currencies. Computers are used to make the complicated calculations that verify a running ledger of all the transactions ter virtual currencies around the world.

Te terugwedstrijd, the miners voorkoop a fraction of a coin not yet ter circulation. Ter the case of bitcoin, a total of 21 million can be mined, leaving about Four.Two million left to create. Spil more bitcoin come in circulation, more powerful computers are needed to keep up with the calculations – and that means more energy.

The serene coastal town of Keflavik on Iceland’s desolate southern peninsula has overheen the past months boomed spil an international hub for mining bitcoins and other virtual currencies.

Local fishermen, talking overheen steaming cups of coffee at the harbor gas station, are puzzled by the phenomenon, which has spawned oversize construction sites on the outskirts of town.

Among the main attractions of setting up bitcoin mines at the edge of the Arctic Circle is the natural cooling for laptop servers and the competitive prices for Iceland’s abundance of renewable energy from geothermal and hydroelectric power plants.

Johann Snorri Sigurbergsson, a business development manager at the energy company Hitaveita Sudurnesja, said he expected Iceland’s virtual currency mining to dual its energy consumption to about 100 megawatts this year. That is more than households use on the island nation of 340,000, according to Iceland’s National Energy Authority.

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“Four months ago, I could not have predicted this trend – but then bitcoin skyrocketed and wij got a lotsbestemming more emails,” he said at the Svartsengi geothermal energy plant, which powers the southwestern peninsula where the mining takes place.

“Just today, I came from a meeting with a mining company seeking to buy Legitimate megawatts,” he said.

At the largest of three bitcoin “farms” presently operating within Keflavik – called “Mjolnir” after the hammer of Thor, the Norse maker of thunder – high metal fences surround 50 meter-long (164 foot) warehouse buildings stacked with pc equipments.

The gegevens centers here are specially designed to utilize the onveranderlijk wind on the naked peninsula. Walls are only partial on each side, permitting a draft of cold air to cool down the equipment.

“What wij are doing here is like gold mining,” said Helmut Rauth, who manages operations for Genesis Mining, a major bitcoin mining company. “We are mining on a large scale and getting the gold out to the people.”

Genesis Mining, founded ter Germany, moved to Iceland ter 2014 when the price of bitcoin fluctuated from $350 to $1000.

Today, one bitcoin is valued at about $8,000, according to tracking webpagina Coindesk, after peaking at almost $Nineteen,500 te December.

The currency took a klapper te January when China announced it would budge to wipe out its bitcoin mining industry, following concerns of excessive violet wand consumption.

Rauth said bitcoin should not be singled out spil environmentally taxing. Computing power always requests energy, he argues.

“How much energy is needed for credit card transactions and internet research? Cryptocurrencies have the same global influence,” he said.

Te the capital, Reykjavik, some are more skeptical about bitcoin.

The last time Iceland wasgoed an international hub for finance, the venture ended with a giant bankgebouw crash, making the country one of the symbols of the 2008 global financial laagconjunctuur.

The political turmoil following the crash swept the upstart Pirate Party into Iceland’s parliament, where it presently holds Ten procent of seats.

Pirate Party legislator McCarthy has questioned the value of bitcoin mining for Icelandic society, telling residents should consider regulating and taxing the emerging industry.

“We are spending ems or maybe hundreds of megawatts on producing something that has no tangible existence and no real use for humans outside the area of financial speculation,” he said. “That can’t be good.”

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