In February 2018, poet and former Icelandic presidential candidate, Andri Snær Magnason, took to Twitter to decry the immense energy consumption of Bitcoin miners. At the time, Vice reported the country was in danger of an energy shortage because of the expansive work of crypto miners.

Magnason’s comments echoed the sentiments of others in Iceland, describing crypto mining as “cryptonite”. Bitcoin mining is an energy-intensive process with an astounding impact in Iceland.

It’s estimated that crypto mining consumes more energy than all of the country’s households combined. Smári McCarthy, a member of Iceland’s Pirate Party, opined, “The value to Iceland / value generated ratio is virtually zero.” Despite hostility and open skepticism from some of Iceland’s industry and thought leaders, an abundance of crypto miners set up shop in their country that is replete with green energy and naturally cool temperatures.  In February, Johann Snorri Sigurbergsson, a spokesman for energy producer HS Orka, told The Washington Post,  “But six months ago, interest suddenly began to spike.

And over the last three months, we have received about one call per day from foreign companies interested in setting up projects here.” The calls correspond to the sharp spike in value and popularity for cryptocurrencies. However, the high prices and vast rewards for crypto mining are significantly lessened now that crypto is in a prolonged, six-month price decline.

In this way, it bears resemblance to another market trend – the housing bubble of the early 2000s. Iceland was uniquely impacted by the 2008 financial crisis that resulted from a speculative housing bubble that nearly bankrupted the country when the bubble finally burst. Read more from…

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