Iceland will use more electricity mining bitcoins than powering its homes in 2018

Reykjavik Energy’s geothermal power plant in Hellisheidi.
Reykjavik Energy’s geothermal power plant in Hellisheidi.
Image: Arni Saeberg
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Bitcoin prices may have plunged in the first months of 2018, but the cryptocurrency craze is still burning bright—and using up a lot of electricity in the process.

Some headlines have claimed that bitcoin mining worldwide uses more electricity than all of Denmark or Ireland, while others argue that such figures are inflated. Now figures from an energy firm in Iceland provide some context. In 2018, HS Orka estimates that Icelandic data centers mining cryptocurrencies will use 840 gigawatt-hours (GWh) of electricity—more than what the country’s entire population consumes in the same year to power their homes.

“What we’re seeing now is…you can almost call it exponential growth, I think, in the [energy] consumption of data centers,” Johann Snorri Sigurbergsson, an HS Orka spokesman, told the BBC. Iceland’s population of 340,000 people use roughly 700 GWh of electricity in their homes per year.

Both cryptocurrency mining and Iceland’s homes use a comparatively small amount of the total electricity the country generates. In 2015, Iceland generated about 18,700 GWh electricity in a year. Most of that energy is used for industrial purposes, such as aluminum smelting or metal-alloy production.

Yet Sigurbergsson says of the demand for cryptocurrency data centers: ”If all these projects are realized, we won’t have enough energy for it.” That’s because it’s not easy to rapidly build new data-mining power plants.

Building out bitcoin-mining operations in Iceland is greener than doing it in China. Almost all of Iceland’s electricity is generated from renewable sources—about 70% from hydro power, and the rest from geothermal energy.

That hasn’t stopped Icelandic politicians from sounding the alarms about the potential consequences of cryptocurrency mining on its environment. “Hydro plants change aquatic ecosystems. Geothermal plants cool surrounding ground. Small negatives compared to, say, coal, but still not neutral,” Smári McCarthy of the Pirate Party wrote on Twitter. “Cryptocurrency mining requires almost no staff, very little in capital investments, and mostly leaves no taxes either. The value to Iceland…is virtually zero.”

In an earlier interview with AP, McCarthy suggested that cryptocurrency miners should be taxed. Then, fearing a backlash, he backtracked, saying he’d like to work with the companies to “strengthen innovation” so that “everybody can benefit.”