#Iceland has long been a prominent hub of bitcoin mining due to 98% of its electricity coming from renewable #geothermal #energy and a cold climate favoring mining farms which must be kept cool can run massive air conditioning #bills in #warmer areas.
The power usage #effectiveness (PUE) of the country is as low as 1.03, almost twice as cost-effective as many nearby countries in #continental Europe where the average is 1.78. As such, Iceland is home to international mining firms like #Genesis and #BitFury which have set up in the nation to capitalize on the natural advantages and now dwarf many of the local mining enterprises. The #establishment of these enterprises was motivated in some cases by the impact of the 2008 #financial crisis on the #Icelandic economy which wiped 60% of the value from the #Iceland krone, the local fiat currency.
#Bitcoin #mining is so prevalent that the energy consumption of mining in Iceland is set to overtake that of the #households of the 340,000 locals living on the small island. 600 mining rigs were famously stolen in a major heist earlier this year, making headlines across the #world and drawing attention to the scale of some of the local #mining farms.
However, #bitcoin #mining took a huge hit after the market crashed in December 2017, sending the price of one BTC from an ATH of $19,783 to $6,362 at the time of writing and causing many mining #enterprises around the world to mine #BTC at cost or even at a loss, leading to speculation that the days of the #Icelandic mining boom were over.
Halldór #Jörgensson, #chairman of Borealis Data Center confirmed this in a recent interview with Red Herring, stating that the infrastructure has now been created in Iceland to pursue other #blockchain-related business ventures:
“The #demand is…shifting more towards the pure blockchain business. So you could say that the #bitcoin wave, the big wave of bitcoin demand, has helped us to build out really fast, because there were really aggressive or interested #parties who wanted to do things and we managed to do the build-out.
We strongly believe that when the whole bitcoin thing has settled down to some kind of a #level that is not as crazy as it was a year ago […] another wave that crops up that will utilize these #infrastructures that have been built up during the bitcoin mining phase.”
It may well be that #bitcoin mining will suffer a permanent decline in the country, but instead of closing up shop completely, those already working in the #cryptocurrency space are now #exploring other options – blockchain enterprise, a growing industry that is set to reach a #value of $2.3 #billion by 2021.
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