Few countries around the world lend themselves to cryptocurrency mining. Iceland has always been a key region in this regard. Although it was never designed to become a hub for cryptocurrency mining, this new business model has introduced a few changes in the country over the years. It is expected the number of Icelandic cryptocurrency mining operations will increase in the future.
The island slowly became the hottest location for one of the fastest-growing industries today — the country is now recognized as the global center for crypto mining.
And it’s partly because of all the ice. Iceland’s freezing temperature, which could be very uncomfortable for humans, is actually the perfect temperature for those powerful PCs used in cryptocurrency mining. It takes a lot of power to cool down those overworked processors. But if a mining facility is located in Iceland, cooling the mining PCs won’t be a problem at all since the weather is already freezing. A company setting up its mining operations in the country would be able to save a lot on air conditioning costs compared to a mining operation located somewhere in the tropics.
Aside from its cold weather, Iceland is also blessed with a very cheap power rate of only 8 euro cents a kilowatt-hour. The cryptocurrency mining process is notorious for being energy-needy. It takes enormous amounts of electrical power to get the job done. To ensure that a mining operation is as profitable as possible, it is necessary to have a mining facility with very low power rates. Iceland fits the bill. The country has one of the lower power rates in Europe. Along with a stable and reliable electrical grid, it’s no wonder that mining companies are setting up their facilities on the island. It’s all in the name of profit.
Unlike other regions, Iceland seemingly has a limitless supply of renewable energy. There will be a time at which converting natural resources to power will no longer suffice. Until then, however, the impact on cryptocurrency mining operations will be minimal. That doesn’t mean these firms can double or triple their energy usage overnight either.
However, Iceland is facing some serious competition from two of its Scandinavian neighbors. With a power rate of just 6.5 euro cents a kilowatt-hour, Sweden offers rates even cheaper than Iceland. Similarly, Norway’s 7.1 cents is also lower.
The lower rates offered by these two alternative mining destinations are not lost on crypto mining companies. In fact, a number of mining firms have already put up facilities in both Sweden and Norway. Given such formidable rivals, it remains to be seen if Iceland will be able to keep its competitive advantage for long.