Iceland Prepares for a Bitcoin Future

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In February 2018, poet and former Icelandic presidential candidate, Andri Snær Magnason, took to Twitter to decry the immense energy consumption of Bitcoin miners. At the time, Vice reported the country was in danger of an energy shortage because of the expansive work of crypto miners. Magnason’s comments echoed the sentiments of others in Iceland, describing crypto mining as “cryptonite”.

Bitcoin mining is an energy-intensive process with an astounding impact in Iceland.
It’s estimated that crypto mining consumes more energy than all of the country’s households combined. Smári McCarthy, a member of Iceland’s Pirate Party, opined,

“The value to Iceland / value generated ratio is virtually zero.”

Despite hostility and open skepticism from some of Iceland’s industry and thought leaders, an abundance of crypto miners set up shop in their country that is replete with green energy and naturally cool temperatures.

In February, Johann Snorri Sigurbergsson, a spokesman for energy producer HS Orka, told The Washington Post,

“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.”

Iceland Is Familiar With Fads

The calls correspond to the sharp spike in value and popularity for cryptocurrencies. However, the high prices and vast rewards for crypto mining are significantly lessened now that crypto is in a prolonged, six-month price decline. In this way, it bears resemblance to another market trend — the housing bubble of the early 2000s.

Iceland was uniquely impacted by the 2008 financial crisis that resulted from a speculative housing bubble that nearly bankrupted the country when the bubble finally burst. According to The Wall Street Journal, Iceland was the “first casualty of the financial crisis.” The nation only remained solvent because of a bond sale to the International Monetary Fund.

The ordeal was traumatic for Iceland’s government and population. Low unemployment, widespread emigration, and a generally distressed economy took years to repair.

This Time, They Have a Plan

Crypto miners don’t have the same impact on the country as the housing industry, but now, the country is prepared to thrive amidst change.

Kristinn Thorisson, Director of the Icelandic Institute for Intelligent Machines, believes that the massive data centers employed by crypto miners are already positioned to be repurposed to fill other in-demand tech trends. She recently told Bloomberg that the data centers are “Central to the industrial revolution that’s underway.”

For instance, Thorisson identified self-driving car initiatives and automatic translators as two burgeoning tech fields that will capitalize on Iceland’s computing power and an abundant amount of renewable energy.

According to Thorisson, these two industries require “way more data and computing power than what’s available.” Therefore, Iceland appears to be future-focused and prepared to repurpose its technology for other flourishing fields.

The country is betting their data facilities will be purposeful for the next 50 years. While it’s impossible to know the longevity of any particular technology, it’s clear that Iceland has a plan for the future. This news is welcomed by many as no one wants to be left behind in the changing crypto landscape.

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