Energy demands soar in Iceland in race for bitcoins

Energy demands soar in Iceland in race for bitcoins

Iceland's National Energy Authority stated that this was more than households use on the island nation of 340,000.

The Pirate Party now holds 6 seats out of 63 in the Althing, Iceland's parliament, meaning that the party alone is unlikely to succeed in pursuing any kind of bitcoin mining tax on its own.

In December 2016, when Iceland was rallying to form an alternative coalition that included the Pirate Party after inconclusive election results, the Pirate Party's founder referred to their platform as the most "favourable" for Bitcoin's path to legality in the country.

'Under normal circumstances, companies that are creating value in Iceland pay a certain amount of tax to the government, ' McCarthy said.

Thanks to a rich natural resource of geothermal and wind energy, Iceland is far less costly than other countries for the massive power needs of mining companies.

Mining of cryptocurrencies is booming in the land of fire and ice, due to low-priced energy.

The sudden demand for energy has overwhelmed Iceland's energy companies.

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Large virtual currency mining companies have established a base on the island, which has an abundance of geothermal and hydroelectric power plants.

The growth of Bitcoin since its inception has led to the need for more bitcoin mining and the demand for more data centers to do the mining. With being said that energy consumption could double to 100 MW this year, that means that already today around 50 MW of installed capacity is only working to keep powerful computers operating.

"How much energy is needed for credit card transactions and internet research?"

The last time Iceland was an worldwide hub for finance, the venture ended with a giant bank crash, making the country one of the symbols of the 2008 global financial crisis. Smári McCarthy, a member of Parliament from the minority Pirate Party, tweeted that, "Cryptocurrency mining requires nearly no staff, very little in capital investments, and mostly leaves no taxes either".

"We are spending tens or maybe hundreds of megawatts on producing something that has no tangible existence and no real use for humans outside the realm of financial speculation", Smári McCarthy, and Icelandic member of parliament told the AP.

Mr Sigurbergsson's calculations were first reported by the Associated Press.

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