Bitcoin Mining in the Beauty of Iceland

Geothermal energy and room to grow makes Bitcoin a natural for Iceland

Beauty is abundant in Iceland. Getty Images

Iceland is a small and beautiful country.  It’s also a country that has had its share of financial crisis.  The country was devastated by the financial crisis of 2008 and it’s currently reeling from another financial crisis impacting its Prime Minister.

With all of the financial issues facing the small country, you might think that it would be open to the possibilities of distributed Blockchain networks and even a digital currency like Bitcoin.

It is after all, home to some of the largest Bitcoin mining businesses.

Iceland enjoys colder than normal temperatures throughout the year and it’s a place where daylight lasts into the evening.  The appeal of their geothermal pools is a reason why tourists flock to the small country, and this geothermal energy helps to keep the price of electricity and energy low in the country.

In 2014, The New York Times reported on the appeal of Iceland for operations interested in Bitcoin mining.  Nathaniel Popper reported on a facility in Iceland, where “more than 100 whirring silver computers, each in a locked cabinet and each cooled by blasts of Arctic air, are the laborers of the virtual mines where Bitcoins are unearthed. The custom-built machines, running an open-source Bitcoin program, perform complex algorithms 24 hours a day, seeking to win a block of 25 new Bitcoins from the virtual currency’s decentralized network.”

As anyone who has tried their hands at Bitcoin mining on a large scale knows, the electricity needs are often as Popper says, “the deciding factor in profitability.” However, Popper reported that the Bitcoin mining “gold rush” was occurring in Iceland, “where geothermal and hydroelectric energy are plentiful and cheap.

And the arctic air is free and piped in to cool the machines, which often overheat when they are pushed to the outer limits of their computing capacity.”

Anthony Cuthbertson reported on the benefits of Iceland for Bitcoin mining in his article entitled, ‘Geothermal Gold: Why Bitcoin Mines are Moving to Iceland’ by stating the advantages of the country for miners, “Iceland, with its 100% renewable energy, perma-cool temperatures and data cable connections to both sides of the Atlantic, is a 'sweet-spot' location for companies to base their massive power-consuming, heat-producing machines.”

These energy cost savings have been huge for companies, but the appeal of using energy sources in the form of geothermal and hydroelectric energy (which is also plentiful in the country) goes beyond just profit to the need to reduce a company’s carbon footprint.

The rural countryside and open spaces also helps to bring in companies that are looking to combine the low energy costs with the potential for expansion.  This has led not only single miners, but companies that are structured to be Bitcoin mining pools, which allows people to join in the advantages of Bitcoin mining without having to buy the specialized equipment on their own.

One of the biigest mining companies is Genesis and they've taken advantage of Iceland to put up their large Bitcoin mining facilities there.  You can even see a live cam feed from within one of their mining facilities in Iceland here.

Genesis also recently announced that they were creating the first Bitcoin mining fund.  Using their Icelandic mines, the fund will be called the Logos Fund and it will allow investors to benefit from the company's mining efforts. It will run as a Securities and Exchange Commission (SEC)-registered Reg D fund, and is seeking approval in other countries as well.

All of this mining activity is heating up the beautiful countryside of Iceland, which is very exciting given that Bitcoin trading is actually illegal in the country.