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Bitcoin Mining To Double Iceland's Power Consumption

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Bitcoin Mining Tax

This is greater than Icelandic households use according to the national energy authority.

"If all these projects are realised, we won't have enough energy for it", Sigurbergsson tells the BBC.

"If all these projects are realized, we won't have enough energy for it", Johann Snorri Sigurbergsson, a spokesman for Icelandic energy firm HS Orka, told the BBC.

Data centres that are mining bitcoin receive small rewards when the programs they run solve complex mathematical problems, generating revenue. Iceland is an attractive place for Bitcoin data centers to build because almost 100 percent of its energy comes from renewable sources. That's why miners here can find quite affordable conditions for their activity as well as super fast fiber-optic networks that are used for internet connections.

That could cause problems, though, as officials warn they won't have sufficient energy to supply the number of proposed Bitcoin mining centers (if those facilities do indeed open).

With its cold climate and cheap (and renewable) geothermal and hydro power, Iceland is becoming rather interesting for crypto currency miners pushing energy demand particularly in the last few months.

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.

Pixabay/MichaelWuenschA Bitcoin (virtual currency) shown here as an illustration photo.

Inorder to make bitcoins, one needs enormous amounts of energy to run their PCs and mine the bitcoins.

Smari McCarthy of Iceland's Pirate Party, an anti-establishment political party that entered Iceland's Parliament after the 2008 financial crash, brought up the possibility of taxing any profits made by Bitcoin mining, considering that a mining company falls under the category of "creating value" within the country.

"The value-to-Iceland/value-generated ratio is virtually zero".

Mr Sigurbergsson said bitcoin mining operations use around 840GWh of electricity to supply data centre computers and cooling systems, with the country's homes using around 700GWh every year. "These companies are not doing that, and we might want to ask ourselves whether they should".

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