Iceland, home and country to 340,000 people has now become a mining field for the famous and leading cryptocurrency, the Bitcoin. Bitcoin mining has been in practice for some time now and has proven to be a lucrative venture for people doing it on a large scale.
When you hear the term, “bitcoin mining,” you may normally picture coins being pulled out of the ground because of the word "mining." However, the coin in question is digital and is thus brought out from a digital field. Basically, bitcoin mining involves the verification of Bitcoin transactions with the sole purpose of promoting honesty amongst Bitcoin users and strengthening the integrity of the currency.
The Miners make use of some specific softwares to solve mathematical problems that creates new bitcoins, and confirms legit transactions or blocks and in return for their service, these miners get some amount of bitcoin. The rate at which a miner solves a problem or finds his “bit-gold” is dependent on the “hash rate” of the system being used. The hash rate is the number of algorithmic calculations that a system can make per second or the calculation speed of a system. That is to say, “the higher the hash rate, the higher the miner’s chances of striking gold.”
In the gold market, the miners are solely responsible for the gold available, so it is with the digital market of bitcoins. As it stands, bitcoin is number one on the digital market and is the centre of attraction. It’s no wonder these miners are needed in order to make it easily available to the general public.
Bitcoin mining does however come with some requirements in order to be successful and to do it efficiently. As earlier mentioned, a miner’s hash rate improves his chances of striking bit-gold. From the use of CPUs to single GPUs and now, multiple GPUs connected together (mini farm) and FGPAs (Field-Programme Gate Array), hash rate has seen a tremendous increase. However, these necessary improvements from the convention computer to “mining machine” hardware has generated it’s own problem. The energy consumption rate of these mining devices has skyrocketed! The devices generate a lot of heat and require special care and attention in order to remain productive.
They have to be placed and used in a very cool environment and the use of AC’s is a very common practice.
Owing to its location at the tip of the Mid-Atlantic Ridge, and the ever-so-present volcanoes in the area, Iceland has proven to be the perfect mining location for active crypto miners yet. The overall temperature of the country vanquishes the need for Air Conditioning and thus saves cost on expenses in keeping the mining hardware cool and running optimally. Also, the availability of volcanoes provide the country with unlimited access to renewable energy thus making energy and power cheap. This factor also helps the miners in reducing cost.
There is substantial evidence to show that Crypto mining will consume more energy than the 340,000 households that are present in Iceland in the year 2018. There also speculations that the energy companies will not be able to accommodate the huge energy requirements of Crypto mining and that the country make likely face a shortage of energy. An average lucrative crypto mining company has very few staff and so, money generated from taxes by the government is close to zero when compared to the money realized by the crypto mining company and that value gets closer to zero as the value of bitcoin rises.
Will Crypto mining dawn an era of energy shortage in land of Ice? Is there a possibility that the crypto mining companies will invest in the energy sector of the country? Will this advent promote the economy of Iceland? These questions will certainly produce answers as the year progresses. One can only hope for positive results.
