Bitcoin Mining a Growing “Waste of Energy” in Iceland Skip to content

Bitcoin Mining a Growing “Waste of Energy” in Iceland

Neither Icelandic authorities nor data centres in Iceland will reveal how much energy is used to mine Bitcoin or other digital currencies in Iceland, Snæbjörn Guðmundsson of nature conservation organisation Náttúrugrið told Vísir. Data centres use 30% more energy in Iceland than all Icelandic homes put together, and while the percentage of this energy that goes toward Bitcoin mining is not public knowledge, it could be as high as 90%.

Iceland’s abundance of renewable energy and cheap power has had both data centres and Bitcoin mining operations flocking to the country in recent years to set up shop. Iceland’s cool climate is another benefit, as data centres produce a lot of heat that would require additional energy to cool if located in a warmer climate. Both politicians and environmental activists have questioned the benefit of Bitcoin and digital currency mining operations for the Icelandic nation as well as their impact on the environment.

New hydropower plant could be used to mine Bitcoin

A 2018 report by KPMG stated that around 90% of energy used by data centres in Iceland had gone toward mining Bitcoin. In a column in Vísir, Snæbjörn refers to a recent analysis by Bitcoin expert Jaran Mellerud, who estimates that Bitcoin mining in Iceland uses around 120 MW of power, or around 85% of the 140 MW of power used by the country’s data centres in 2022. These figures have not changed much in recent years despite assertions from Iceland’s National Power Company (Landsvirkjun) that they would reduce the sale of Iceland’s energy to Bitcoin mining operations.

Snæbjörn is concerned that the proposed Hvammsvirkjun hydropower plant in South Iceland’s Þjórsá river would be used to power further Bitcoin mining in Iceland, although the National Power Company has stated that power plants would not be built solely for the energy needs of Bitcoing mining centres.

New York-based Bitcoin mining company told the Wall Street Journal last month that they would expand their operations in Iceland in response to an impending tax on Bitcoin mining in the United States. At the same time, Icelandic energy companies have stated there is no capacity for increased digital currency mining in the country.

“This is a waste of energy that should not be happening in a society like the one we live in today,” Snæbjörn stated.

Sign up for our weekly newsletter

Get news from Iceland, photos, and in-depth stories delivered to your inbox every week!

* indicates required

Subscribe to Iceland Review

In-depth stories and high-quality photography showcasing life in Iceland!

Share article

Facebook
Twitter