Cryptocurrency mania might have gone a little too far in Iceland. The region’s energy company says Bitcoin mining is becoming so popular that the country will likely use more electricity to mine coins than power homes this year.
That could cause problems, though, as officials warn they won’t have sufficient energy to supply the number of proposed Bitcoin mining centers (if those facilities do indeed open).
“If all these projects are realized, we won’t have enough energy for it,” Johann Snorri Sigurbergsson, a spokesman for Icelandic energy firm HS Orka, told the BBC.
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. The country’s homes, collectively, use about 700 gigawatt hours per year, he said. Iceland’s population is about 340,000.
Iceland has become a haven for cryptocurrency miners in part because of its cheap electricity. Prices are contained because nearly all of the country’s energy comes from renewable sources, prompting more mining companies to consider opening operations in Iceland.
Icelandic government officials are starting to question the value of such operations, though. Mining data centers don’t need to hire a big staff and don’t require especially large infrastructure investments. They typically pay low tax bills, as well.
That last part might change, though.
“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. “These companies are not doing that, and we might want to ask ourselves whether they should.”