Iceland will use more energy mining bitcoin than powering the country

Iceland may soon use more electricity to mine bitcoin than it uses to power every home, according to an Icelandic energy expert.

The energy used by Iceland's bitcoin mining market is experiencing "exponential growth," and data centers may use more energy than all of the country's homes in 2018, Johann Snorri Sigurbergsson from Icelandic energy company HS Orka told the BBC.

Sigurbergsson also said HR Orka "won't have enough energy" to power numerous new data centers that have been proposed.

Bitcoin mining occurs when computers verify existing bitcoin transactions by solving complex mathematical problems, and then receive bitcoin as a reward.

Sigurbergsson told the BBC he estimates Iceland's bitcoin mining tools currently use around 840 gigawatt hours of electricity to power computers and cooling systems each year, while most of the country's homes use around 700 gigawatt hours.

Bitcoin mining thrives in Iceland, where energy is cheap, and internet connections use super fast fiber-optic networks.

Additionally, Iceland's cold climate plays an important role in ensuring crypto utilities don't overheat. Mining hardware generates large amounts of heat, and Iceland's year-round cool weather saves companies from additional temperature control costs.

But the centers still use huge amounts of electricity.

Genesis Mining, one of the largest crypto miners in Iceland, has opened three mining facilities in Iceland and in 2016 CEO Marco Streng speculated the company may be one of the biggest single users of power in the country.

The rise of crypto mining in the country has prompted government members to consider steps to tax the industry.

“Under normal circumstances, companies that are creating value in Iceland pay a certain amount of tax to the government,” Smari McCarthy, a member of Iceland’s Pirate Party, told the Associated Press. “These companies are not doing that, and we might want to ask ourselves whether they should.”