Bitcoin mining boom in Iceland uses huge amounts of power

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Icelandic Lawmaker Floats Bitcoin Mining Tax

That is more than households use on the island nation of 340,000, according to Iceland's National Energy Authority.

"Four months ago, I could not have predicted this trend - but then bitcoin skyrocketed and we got a lot more emails", he said to the Associated Press at the Svartsengi geothermal energy plant, which is now powering a lot of the bitcoin mining operations going on at the southwestern peninsula of the country.

Johann Snorri Sigurbergsson from Icelandic energy company HS Orka told BBC that there simply isn't enough energy to power newly-proposed data centers.

Data centres that are mining bitcoin receive small rewards when the programs they run solve complex mathematical problems, generating revenue. Prices are contained because almost all of the country's energy comes from renewable sources, prompting more mining companies to consider opening operations in Iceland.

Bitcoin mining refers to the work done by computers connected to the global Bitcoin network.

He said that bitcoin mining will require about 840 gigawatt hours of electricity this year.

The Pirate Party now holds 6 seats out of 63 in the Althing, Iceland's parliament, meaning that the party alone is unlikely to succeed in pursuing any kind of bitcoin mining tax on its own. Smári McCarthy, a member of Parliament from the minority Pirate Party, tweeted that, "Cryptocurrency mining requires nearly no staff, very little in capital investments, and mostly leaves no taxes either".

An Icelandic lawmaker has suggested imposing a new tax on bitcoin mining companies.

Bitcoin mining Every ten minutes a miner wins a price of 12.5 bitcoins - still worth over a hundred thousand dollars in spite of a huge decline of more than half of bitcoin's value.

"Under normal circumstances, companies that are creating value in Iceland pay a certain amount of tax to the government", McCarthy explained.

But as crypto-currencies rise in popularity, mining operations certainly continue to use more and more resources - recent analysis of European energy use in 2017 by campaign group Sandbag noted that Bitcoin mining was contributing to additional power demand in the technology sector. "These companies are not doing that, and we might want to ask ourselves whether they should".

The cryptocurrency boom is raising a lot of concerns about the energy required to power the mining projects.

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