- The “cowboy crypto mining era” that saw foreigners flock Iceland to take advantage of cold weather to mine Bitcoin seems to have ended.
- Cryptocurrency mining has been the largest single electricity consumer in Iceland.
- Demand for blockchain and crypto facilities now shifting towards pure blockchain businesses.
The chairman of Reykjavik-based Borealis Data Center Halldór Jörgensson, has told the Red Herring news site that the demand from local crypto and blockchain facilities is “shifting more towards the pure blockchain business,” and the focus is no longer on Bitcoin mining.
The mining frenzy reached fever pitch in December 2017 when Bitcoin reached its highest ever price is over when Iceland played host to desperate foreigners looking to take advantage of the country’s crypto friendly environment.
Crypto Mining Frenzy Comes to a Closure
Jörgensson told the Red Herring that the passion that surrounded Bitcoin mining has gone down to a level that can be referred to as “not as crazy as it was a year ago.” The chairman, however, appreciated that the crypto mining wave has its positive aspects as it helped the local energy and data industries realize an unprecedented growth and helped in developing infrastructures that can now develop blockchain-related businesses.
He said:
“We strongly believe that when the whole Bitcoin thing has settled down to some kind of level that is not as crazy as it was a year ago,” […] “We believe there’s another wave that crops up that will utilize these infrastructures that have been built up during the Bitcoin mining phase.”
Iceland rose to become a leading destination for people interested in crypto mining, as a result, the availability of a lot of cost-efficient renewable energy sources (geothermal and electricity) and the natural cold climate, a combination that makes it ideal for cryptocurrency mining. The country hosts to Genesis Mining, one of the world’s 5 biggest crypto mining farms; Genesis Mining is reported to be the single largest electricity consumer in Iceland.
Economic Implications
Johann Snorri Sigurbergsson, the business development manager of a local energy supplier HS Orka, had predicted February that the volume of crypto mining in Iceland would likely double in 2018. In July, HS Orka’s CEO Asgeir Margeirsson stated that the crypto mining industry had driven the country towards “the fourth revolution” while the director of Icelandic Institute for Intelligent Machines said Bitcoin miners were “central to the industrial revolution is still underway.”
The huge decline in cryptocurrency prices seems to have taken its toll on the cryptocurrency mining sector: a popular cloud mining platform called HashFlare recently downed its tools and stopped the mining business altogether. Stakeholders in Iceland may try to avoid a repeat of the 2008 financial crisis of 2008 when the country’s currency dropped by over 60 percent.
