Iceland is currently one of the premier locations of cryptocurrency servers thanks to the country’s enviable location of being in the middle of the Atlantic Ocean. The slew of hydroelectric powers present in the country are due to the numerous hot springs and rivers. Add in Iceland’s cool climate and the end result makes the country a perfect place for data-mining centers and its ton of servers – all of which are always on the brink of overheating.
Cryptocurrencies depend on blockchain technology in order to process digital currency trading. Each transaction needs to be tracked and verified – an operation that is akin to a puzzle since trading occurs in a decentralized network. Plus, no specific authority is in charge to monitor the payments. Transactions therefore require a large quantity of mathematical calculations – calculations that eat up a large capacity in a computer server, thus resulting to more demand in electricity.
The demand for more energy to mine cryptocurrency could produce an energy shortage on Iceland and affect its 340,000 residents. Requests for new data centers to open in Iceland are coming from companies looking to cash in on the 21st century gold rush. According to spokesman Johann Snorri Sigurbergsson of HS Orka, an Icelandic energy producer, “There was a lot of talk about data centers in Iceland about five years ago, but it was a slow start.” He added, “But six months ago, interest suddenly began to spike. And over the last three months, we have received about one call per day from foreign companies interested in setting up projects here.” He explained, “If all these projects are realized, we won’t have enough energy for it.”
German company Genesis Mining moved to Iceland three years ago. Since then, more companies are and will be coming in. Concerns are brewing that the country might need to slow its investments down due to the possibility of having its electricity generation capacity stretched to a dangerous degree.