At a secret location in the middle of one of Iceland’s breathtaking lava fields stands a warehouse whose nondescript siding belies the fact it is ground zero in a digital gold rush for cryptocurrencies that is burning through more electricity than Icelanders’ homes.
Iceland’s combination of fire and ice not only makes it a stunning site to film parts of the medieval fantasy epic Game of Thrones, it also offers a unique combination of cheap renewable energy and free air-conditioning that is making it a promised land for those “mining” virtual currencies, including bitcoin, using powerful computers that are voracious users of electricity and throw off lots of heat.
And noise.
Photo: AFP
The din from shelves and shelves of computers whirring inside the 400m2 warehouse rivals a jet during takeoff.
Unlike the dollar and the euro, bitcoin is not issued by central banks.
Instead it is “mined” or created in computer “farms.” It uses computers souped up with six graphics cards tasked with the heavy lifting of thousands of thousands of calculations needed to solve complex algorithms to process bitcoin transactions and be rewarded with bitcoins in exchange.
“It’s possible for everyone to do it at home. There is no one stopping you [and] there are no technical limitations,” Genesis Mining Ltd head of operations Philip Salter said.
Last year saw a meteoric rise of hundreds of virtual currencies led by bitcoin, which was fetching almost US$20,000 per unit in December, as both amateur and professional miners jumped onto the cryptocurrency bandwagon.
Home miners often use an old computer, have no choice where they operate and are lucky if they get a fraction of a bitcoin every now and then.
Professionals like Genesis Mining need to invest serious amounts to build and equip a facility like this one with a surface area one-third of an Olympic swimming pool, but which has a much greater chance of catching part of the 12.5 bitcoins created every 10 minutes.
However, they can choose where to set up operations, and that choice can have a huge impact on their profit as the price of the electricity to power and cool the computers varies considerably from country to country.
Iceland is attractive for cryptocurrency mining because of its cheap electricity, which has the added advantage of being generated from clean geothermal energy.
At a 0.065 euros (US$0.08) per kilowatt-hour before tax, the cost of electricity in Iceland is nearly half the EU average.
This makes Iceland one of the most competitive nations in Europe after Serbia, Macedonia and Bosnia.
However, Iceland also has an advantage in that its average annual temperature is about 5°C, meaning mining farms can for most of the time just suck in cool air from the outside instead of running energy-hungry air-conditioners.
The power usage efficiency “is really good in Iceland because of the natural cooling,” said Johann Snorri Sigurbergsson, director of business development at Iceland’s power company HS Orka.
A growing number of firms like Genesis Mining, which was previously based in Bosnia, have chosen to set up shop in Iceland, which means demand for electricity has shot up.
“The demand has been increasing exponentially, especially the last three months,” Sigurbergsson said.
The increase has come as the price of bitcoin has plunged from its peak of nearly US$20,000 to less than US$9,000, with analysts saying that the price decline has made operating costs even more of a concern for miners.
Salter, who fears the growing competition in the sector, said bitcoin’s “price isn’t a very good indicator on how [the] bitcoin mining industry is doing.”
He might not have that much more competition from neighbors, as Sigurbergsson said HS Orka “will not be able to supply all the demand” from miners wanting to set up operations.
The utility is “in the great position of we can pick and choose who we can do business with,” he said.
HS Orka has estimated that Iceland’s three largest bitcoin farming companies this year will consume more electricity than the nation’s 350,000 inhabitants.
Miners also have another worry: Even a virtual gold rush attracts real thieves.
From December to January, equipment worth an estimated 1.6 million euros was stolen.
DAMAGE REPORT: Global central banks are assessing war-driven inflation risks as the law of unintended consequences careens around the world, spiking oil prices Central banks from Washington to London and from Jakarta to Taipei are about to make their first assessments of economic damage after more than two weeks of conflict between the US and Iran. Decisions this week encompassing every member of the G7 and eight of the world’s 10 most-traded currency jurisdictions are likely to confirm to investors that the specter of a new inflation shock is already worrying enough to prompt heightened caution. The US Federal Reserve is widely expected to do exactly what everyone anticipated weeks ahead of its March 17-18 policy gathering: hold rates steady. The narrative surrounding that
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) share of the global foundry market rose to almost 70 percent last year amid booming demand for artificial intelligence (AI), market information advisory firm TrendForce Corp (集邦科技) said on Thursday. The contract chipmaker posted US$122.54 billion in revenue, up 36.1 percent from a year earlier, accounting for 69.9 percent of the global market, TrendForce said. Its share was up from 64.4 percent in 2024, it said. TSMC’s closest rival, Samsung Electronics, was a distant second, posting US$12.63 billion in sales, down 3.9 percent from a year earlier, for a 7.2 percent share of the global market. In the
At a massive shipyard in North Vancouver, Canadian workers grind metal beams for a powerful new icebreaker crucial to cementing the country’s presence in the increasingly contested arctic. Icebreakers are specialized, expensive vessels able to navigate in the frozen far north. And “this is the crown jewel,” said Eddie Schehr, vice president of production at the Seaspan shipyard. For Canadian Prime Minister Mark Carney, who heads to Norway next Friday to observe arctic defense drills involving troops from 14 NATO states, Canada’s extreme north has emerged as a strategic priority. “Canada is and forever will be an Arctic nation,” he said ahead of
Chinese entrepreneur Frank Gao used to spend long hours running his social media accounts but now outsources the chore to artificial intelligence (AI) agent tool OpenClaw, which is taking China by storm despite official warnings over cybersecurity. OpenClaw, created in November by an Austrian coder, differs from bots such as ChatGPT because it can execute real-life tasks such as sending e-mails, organizing files or even booking flight tickets. “Since January, I’ve spent hours on the lobster every day,” Gao said in an interview, referring to OpenClaw’s red crustacean mascot. “We’re family.” After downloading OpenClaw, users connect it to artificial intelligence models of their
RSS