By KATHERINE CERAVOLO
Running low on energy, Iceland has to make a tough decision. As a power shortage is approaching, the region will need to decide if bitcoin mining is more important than powering houses this year.
The time has finally come: questioning the true value of bitcoin. All the fun math (mining) games may come to an end for the Icelandic people. The bitcoin mining tools include computers, servers and cooling devices – so pretty much, electricity. In simple terms, these tools use 840 gigawatt hours of electricity per year while homes in Iceland use 700 per year. Additionally, with more projects looking to jump on the cryptocurrency wagon, the situation could get worse.
This industrial development has been questioned since the day the idea was conceived, and now it’s starting to cause a real problem in Iceland.
Why there? Well, Iceland has cheap electricity and a great portion of the energy comes from renewable resources. The abundance from geothermal and hydroelectric power plants is to thank for the availability. Since these companies pay a low tax bill, for now, the situation continues: the power supply will definitely not be able to keep up with such a high demand. However, things might change to stop a lot of growth from affecting the region.
Companies like Expedia allow for digital currency pay, which increases the need for more bitcoins. One common way to gain bitcoins is by mining for the currency in a computer game. Sounds realistic, right?
The trauma brought on by bitcoins will continue to spread if the demand continues. Losing electricity to a coin that isn’t even in circulation yet seems unnecessary at most.
Iceland will have to chose to either step away or go all in, but hopefully whichever way the situation flows, it will not end with another bank crash.