Virtual currency miners are flocking to Iceland due to its abundance of renewable energy, and some lawmakers want to tax them, according to ABC News. Iceland’s renewable energy from hydroelectric and geothermal power plants has delivered competitive electricity rates. Smari McCarthy, a lawmaker from Iceland’s…
Virtual currency miners are flocking to Iceland due to its abundance of renewable energy, and some lawmakers want to tax them, according to ABC News. Iceland’s renewable energy from hydroelectric and geothermal power plants has delivered competitive electricity rates.
Smari McCarthy, a lawmaker from Iceland’s Pirate Party, wants to tax bitcoin mines. According to ABC News, the lawmaker’s initiative will find support due to Icelanders’ skepticism about financial speculation following the country’s banking crash in 2008.
Companies creating value pay taxes under normal circumstances, McCarthy told The Associated Press.
The town of Keflavik on Iceland’s southern peninsula has attracted virtual currency miners who are building large construction sites on the town’s outskirts.
Johann Snorri Sigurbergsson, a business development manager at Hitaveita Sudurnesja, a local energy company, expects virtual currency mining to double the country’s energy consumption to around 100 megawatts, which exceeds that used for the country’s 340,000 households, according to the country’s National Energy Authority.
Sigurbergsson said he could not have predicted this development four months ago. The Svartsengi geothermal plant supports the southwestern peninsula, where the mining takes place. He said he recently met with a mining company that wants to purchase 18 megawatts.
At Mjolnir, the largest of three mining farms in Keflavik, tall metal fences surround 50-meter-long warehouse buildings containing computer mining rigs.
These data centers are designed to take advantage of the regular wind on the peninsula. The buildings have partial walls to allow cold air to cool the equipment.
Helmuth Rauth, who oversees operations for Genesis Mining, said bitcoin mining should not be singled out as environmentally taxing. He said computing always requires energy. He pointed to the energy needed for credit card transactions and Internet research, and said cryptocurrencies have the same global impact.
Rauth compared the mining activity to gold mining. Genesis Mining began in Germany and moved to Iceland in 2014.
Residents of Reykjavik remain skeptical. When the bank crash hit in 2008, the Pirate Party was swept into power and presently holds 105 of the seats in Parliament. McCarthy questions the benefit of bitcoin mining to society, and believes it should be regulated and taxed.
Iceland is spending tens or hundreds of megawatts to produce something with no tangible existence or real use for humans outside of financial speculation, which cannot be good, he said.
Featured image from Shutterstock.
Last modified: January 24, 2020 11:15 PM UTC