Electricity use at Bitcoin mining data centres in Iceland is likely to exceed that of all Iceland’s homes this year, according to Icelandic energy firm HS Orka.
Many large virtual currency companies have been attracted to Iceland due to its abundance of renewable energy.
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The bitcoin mining process involves computers being rewarded with bitcoin for processing mathematical equations through specialised software.
A huge amount of electricity is needed to run the computers that create bitcoins, with virtual currency mining to double the country’s energy consumption to around 100 megawatts this year.
That is more than households use on the island nation of 340,000, according to Iceland’s National Energy Authority.
A spokesman for HS Orka Johann Snorri Sigurbergsson told the Associated Press:
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By GlobalDataUnder normal circumstances, companies that are creating value in Iceland pay a certain amount of tax to the government. These companies are not doing that, and we might want to ask ourselves whether they should.
Meanwhile, the new industry’s growth has prompted lawmaker Smari McCarthy of Iceland’s Pirate Party to suggest taxing the profits of bitcoin mines.
McCarthy told the Associated Press:
Under normal circumstances, companies that are creating value in Iceland pay a certain amount of tax to the government. These companies are not doing that, and we might want to ask ourselves whether they should.
Iceland has a population of around 340,000 people who use around 700 gigawatt hours every year.
Bitcoin mining operations will use around 840 gigawatt hours of electricity to supply data centre computers and cooling systems, Sigurbergsson told the BBC.
Bitcoin mining companies have grown rapidly in recent months, along with the price of bitcoin.
Despite recent falls, a single bitcoin is still worth almost $9,000, up from less than $2,000 this time last year. The price peaked in December at almost $20,000.
Currently around 3,600 new bitcoins are created every day through mining. Some 21m bitcoins will eventually be mined, with around 4.2m still to be created.
Bitcoin’s current global annual electricity consumption is estimated to be 32.56 terawatt hours — though some have questioned this calculation.
Data from Eurostat shows that in 2015, Denmark consumed 30.7 terawatt hours of electricity and the Republic of Ireland consumed 25.07 terawatt hours.
