Concerns About Powering Bitcoin Farms in Iceland Arise

Iceland has become one of the world’s top countries for mining bitcoins in. Companies have been moving to Iceland for mining purposes because it has data cable links to both North America and Europe. Also, the calm temperatures of Iceland make it a safe place for mining servers to be stored in without them getting hot.

The fact that renewable energy resources are plentiful in the country is especially a factor to consider as well. Renewable energy is cheaper and easier to utilize, thus keeping mining costs down. Taxes in Iceland are also relatively low. It does not cost much to set up a mining array in Iceland either as the rent costs for using housing services are low.

But while Iceland has become popular for managing such mining functions among other data center actions that require massive amounts of processing power, there are worries that too much energy is being used in Iceland for bitcoin powering needs. A spokesman with HS Orka, a popular energy firm in Iceland, states that the country does not have enough energy to manage all the planned bitcoin mining functions that could come out to the area. This may lead to possible new taxes for bitcoin mining groups in the country.

HS Orka states that about 840 gigawatt hours of energy were used in the past year on bitcoin mining devices. These include computers, servers and various cooling materials. In comparison, only 700 gigawatt hours of energy were used to power up homes around the country. This is to cover a population of about 340,000 around Iceland.

The ongoing energy crunch in Iceland could potentially impact future mining functions around the country. This comes as it is difficult to produce more renewable energy sources for bitcoin mining groups to utilize.

Added energy may also be required to get more bitcoins mined. Only a little more than four million of the 21 million bitcoins planned in the currency’s lifetime are still available to be mined. Additional efforts would be required for mining those coins. This comes as the mining functions would be complicated with more difficult problems to solve. Extra energy would be needed to ensure that bitcoins can actually be mined so those complex problems can actually be resolved.

The Icelandic Pirate Party stated in a report to the Associated Press that there might be one sizeable change for mining in the country. At this moment, bitcoin mining groups do not have to pay significant taxes for their operations. But the Pirate Party is encouraging a change to possibly increase the total amount of taxes that people would have to pay for their functions.

The reasoning is that companies that are taxed in Iceland are typically ones that create value in the country. The mining groups that operate in Iceland are not getting taxed in spite of creating some kind of special value for business in the country. The government may be aiming to get involved with managing some of the taxes in the country to try and get people to pay more for their mining functions.