Due to its sheer abundance of geothermal and hydroelectric power plants Iceland became the home of many Cryptocurrency mining farms and companies in the last couple of months. The near power plants guarantee cheap energy and the cold temperatures further minimize the energy costs used for cooling the rigs. Energy saving is a huge deal for miners since its literally the only variable cost to save money while mining.
According to the Iceland’s National Energy Authority and Johann Snorri Sigurbergsson, business development manager at the energy company HS Veitur those mining projects will most likely double Iceland’s energy consumption. Which basically means: Iceland is using more energy to mine Bitcoin & Co than to power their 340,000 citiziens homes.
This shows clearly one of the biggest problem there is with Bitcoin. The energy consumption and therefore the transaction fees of the network is to high. Although many investors still see a great potential in Bitcoins and in its future price. There are many new technologies out there used by some Altcoins like the Tangle-technology used by IOTA with a significant increase in energy costs.
Even though I see a great future in Cryptocurrencies there are many things that need to improve before it can be implemented mainstream.
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It sounds like Bitcoin is threatnening the power supply of Iceland. The conditions for mining Bitcoin sound optimal there but both the country and the Bitcoin network need to find more cost friendly and optimized ways of generating and using of electricity. Good informative post.
well I wouldn't say it is threatening Iceland's power supply since Iceland basically has unlimited free power (geothermal mostly), but the general point definitely holds that a real issue with bitcoin is the ridiculous (and growing) electricity costs necessary to mine. One of many reasons I don't see Bitcoin sticking around for very long, or at least, not sticking around and being relevant. it is already almost irrelevant, the transaction "speed" and fees are so ridiculous that the idea of using bitcoin as a payment network is pretty much already relegated to fringe cases/large transfers. I seriously doubt Bitcoin will still have the largest coin market cap by end of 2018.
Oh. I get you on the point of the power issue. I agree with you. Bitcoin has become expensive on all sides. The attraction to it initially was it's low rates and faster transaction speed. Other altcoins have surpassed it in that regard. I see your point.
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This is among the top problem bitcoin needs to address. Crypto market is getting competitive and to remain at the top they have solve every consumption and scalability issues.
Hah! This is truly funny news! Mining could really break down Icelands economy! :)
Very inspirational post @elleok