Extreme Bitcoin Mining Aids an Unexpected Revolution in Iceland

Story by:  Ragnhildur Sigurdardottir and Nick Rigillo

After devouring nearly as much energy as all of Iceland’s households combined, Bitcoin miners may be about to return something to the community that’s housed them.

Iceland is looking past the faddishness of cryptocurrencies and toward other projects that need the same kind of infrastructure Bitcoin miners rely on. These include areas like deep learning applications for self-driving cars or automatic translators.

Bitcoin “probably won’t be here far into the future” said Johann Snorri Sigurbergsson, business development manager at the HS Orka power plant in Iceland, which provides electricity to the data centers that miners use. But the centers themselves will become new technology incubators, and “that’s the bet we’re making,” he said.

Mining for Bitcoin requires lots of energy, both to do the actual mining but also to cool the enormous computers used to crack the codes that release the limited supply of Bitcoin. Iceland estimates the industry will consume more than 100 megawatts by the end of the year.

The island became a magnet for the practice once miners figured out that the place is very cold and that electricity there — geothermal and hydropower — costs a lot less than in most other places. Iceland’s cheap energy has already drawn other power intensive industries, such as aluminum smelting.

Painful Memories

Iceland is more sensitive than most to the risk of supporting an industry that may be headed for bust. It still has painful memories of the 2008 banking meltdown, which drove the island into the arms of the International Monetary Fund and resulted in capital controls that have only just been lifted.

The future of Bitcoin, and other cryptocurrencies, is far from clear. After soaring close to $19,000 late last year, it crashed to less than $6,000 last week. Many other forms of cryptocurrency — Dead Coins lists about 800 now effectively worth nothing — have collapsed entirely.

Bitcoin Bloodbath Nears Dot-Com Levels as Many Tokens Go to Zero

But Iceland also needs to diversify its economy to rely less on fishing, tourism and aluminum smelting. And that’s where the data centers created to enable Bitcoin mining could play a key role.

Building Knowledge

Gisli Kr. Katrinarson, chief commercial officer at Iceland’s biggest data center operator, Advania, says it has “developed immense knowledge about the most efficient ways to operate and maintain these blockchain systems” and is now using this knowledge and experience “to increase the quality of service for our customers.”

Original story: https://tinyurl.com/ycaxj8zg

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