The bull case for Bitcoin in Iceland

Frank van der Beek
Chief Editor

Iceland has become a popular location for Bitcoin mining due to its abundance of renewable energy sources and favorable cold climate. The country has attracted a significant amount of hash rate in recent years, but there is still a lot of room for growth. In this article, we will explore how Iceland can attract an even larger share of the Bitcoin hash rate. And show you how Iceland could be the silicon valley of Bitcoin mining. As the country could grow even richer with Bitcoin within its borders.

How Iceland can attract a large share of the Bitcoin hash rate

One of the main advantages Iceland has for Bitcoin mining is its abundance of renewable energy sources. The country has a tremendous amount of geothermal and hydroelectric power. And this power could be used to power Bitcoin mining operations. This is a major advantage for miners, as energy costs are one of the biggest expenses in the industry. By using renewable energy sources, miners can reduce their operating costs and increase their profit margins. While at the same time reducing the emotions of the Bitcoin blockchain. Because all of this energy is emission-free.

So to attract more Bitcoin mining operations to Iceland, the government could offer tax incentives or help set up more BTC mines. Especially for companies that use renewable energy sources and help invest in the energy grid. This would make Iceland one of the most attractive locations for miners and could lead to a significant increase in the Bitcoin hash rate. Which would mean a stronger and more secure network.

Another way to attract more Bitcoin miners to Iceland is by creating clear legislation around Bitcoin and crypto. As for now most of the world still has almost no clear laws surrounding the whole crypto industry. This can make it difficult to set up operations. Which hinders growth, especially in places where a lot of growth and capital could flow into. 

Improving the energy grid of Iceland could offer tremendous help to Bitcoin miners. But instead of having the people of Iceland invest in this. They could also make it more accessible for Mining companies to invest in the grid. Making it so that not only the mining industry could bring in a lot of taxes for the country, it could also help build out their electricity grid. 

Iceland has a lot to offer the Bitcoin mining industry, and there is significant potential for growth. By offering tax incentives, improving infrastructure, and investing in the grid, could all create a favorable environment for the industry. This way Iceland could attract an even larger share of the Bitcoin hash rate. Making it wield more influence. With its abundant renewable energy sources and its cold climate conditions, Iceland is well-positioned to become an even larger player in the Bitcoin mining industry.

Why Bitcoin mining in Iceland is so attractive

Mining Bitcoin in Iceland looks like the obvious choice for any Bitcoiner that has ever been to the country. Because Iceland has cheap electricity, lots of space, a naturally cold climate, and most important of all the electricity generated there is 100% renewable. 

You see Iceland is a unique country in its position and history. Because Iceland's location on the map is exactly on the line between the American and European tectonic plates. This makes the country a volcano hotspot. And the perfect place to generate thermal energy. Similar to what El Salvador is doing with their volcano. This fantastic natural resource makes it so that their energy prices are so low that people don't even think about turning off their equipment when they leave the house. And the fact is that with an island of their size and a population of only 370.000 people. There is a lot more green energy that can be harnessed for other use cases.

As I said, besides green energy, Iceland also has a lot of empty space. As it has a rather small population compared to its size. With a population density of 4 people per square Kilometer. And of this 95% of the people live in an urban area. This does not make land cheap on the Island. But if you place the mining facility outside of the city and punt in some effort. You could find a very good deal on a plot of land for the facility.

Bitcoin mining and Greenhouse farming

Iceland is a country that can not grow a lot of its own food. This comes from the fact that the weather just does not permit a lot of plants to grow there. Because of this a lot of the food grown on the island is grown in greenhouses. These houses protect the plants and heat up the space to make it a nice growing climate inside. 

Because Iceland has cheap energy, heating these greenhouses can still be a good and profitable business. But what if they would add BTC to it?

Not only could greenhouse farmers make a profit from their harvest. But they could farm some Bitcoin at the same time. By not directing electricity through heaters but instead through Bitcoin miners. Because these miners create a lot of heat that needs to be vented, they could as well heat up the greenhouses. This way no energy is wasted. Making both farming and Bitcoin mining in Iceland more affordable. While at the same time lowering the cost of food for the inhabitants of the island country.

Why Bitcoin mining could make Iceland rich

Well, don't get me wrong Iceland is, compared to most countries, already a very rich country. And finds itself currently in the 5th spot for the highest GDP per capita of $73,233 (according to the Worldometer). But with a relatively small part of the world's total GDP of 0.03%. This means that Iceland does not really need to get much richer, but it could. How, you might wonder?

Well, it's simple. A country like Iceland with its abundant energy supply could easily legalize and regulate the Bitcoin mining industry. By doing so it could attract a large portion of the Bitcoin mining hash rate. So if Iceland would use its resources to attract this hash rate it could also (lightly) tax the companies that mine BTC, as well as earn on the energy that they would sell to them. 

Now because Iceland has a lot of space and also a lot of energy, they currently do not use it to its full potential. They could easily set this up and profit from the BTC mining industry. Which could make their population even richer. Taking in mind the sheer size of the mining industry and the speed at that it grows. Especially when we compare this to the island nation’s population. How much Iceland could profit from Bitcoin, would only be determined by how attractive they could make it for miners to move there.

Why Iceland should adopt Bitcoin as their currency

Although Iceland as a nation is rich when we look at its GDP per capita, its overall economy is relatively small on a world scale. Making them rely on other countries and predominantly on a few industries. Where in the past this used to be fishing, at the moment Iceland’s biggest industry is tourism. Which is in all fairness not too reliable of an industry as we have seen during the global pandemic. 

So to make their economy more secure Iceland could adopt the Bitcoin standard. Because when the main industry of Iceland gets hit and slows down, its currency loses a lot of value. Making it more expensive for Icelanders to buy foreign products and leave their country. By adopting BTC as its currency Iceland could prevent this from happening. As BTC is not just backed by a country's economy and its policies alone. Because the digital currency BTC is backed by energy and the whole network of people using it all over the world. And this is all besides the obvious use cases that Bitcoin has when it comes to inflation and politics.

Not only would Bitcoin help stabilize Iceland’s economy it could also literally print more money without inflation. As clear tax laws on Bitcoin mining, plus the adoption of BTC as a currency could potentially bring a lot of Bitcoin mining to Iceland. And this would mean that a lot of the BTC fees would flow through Iceland. Making them positioned as an international money hub. Especially as BTC sees more adoption around the world.

Doing this wouldn't even require the country to buy into BTC as tax and regulation could make it so that the government earns some themselves. So they would not have to ask whether or not it is too late to buy themselves. A question that many individuals ask themselves all the time.

How Bitcoin could fund Iceland’s electricity infrastructure

Bitcoin miners need electricity and most importantly, electricity infrastructure. In Texas, USA we see that miners help with balancing renewable electricity and grid stability. By turning on and off the mining facilities when electricity is needed more by the network or when there is extra power coming from renewable sources in the area. This is one of the examples where Bitcoin helps the grid and makes a nice circular supply of power. 

Not only does Bitcoin help the grid, but the grid also helps Bitcoin mining. That's why Iceland could take benefit from this simple fact. By letting miners invest in new facilities in the country. They could also invest in the grid that supports electricity for the people living there as well as for the miners. This makes a win-win for both Iceland and Bitcoin miners. Giving the country a stronger and more resilient energy grid. But also making electricity accessibility more spread out to the countryside where miners are likely to place themselves. 

Genesis Bitcoin mine in Iceland

Genesis, one of the biggest companies in the world of Bitcoin mining has already seen the light in Iceland. With one of their largest farms set up in the island nation. Genesis choose the location of their Bitcoin farm based on the facts that we have stated earlier. Like the fact that Iceland has cheap renewable energy and a cold climate. 

Genesis owns BTC farm is reported to consume more electricity than all of Iceland’s homes combined. To some, this might sound bad, but considering that all of the electricity is renewable and that these farms support the energy grid. It would be actually a good sign to see more miners like Genesis open shop in Iceland. 

Sadly not a lot has been reported in recent times on BTC mining in Iceland or Genesis operations there. This article is one of the first to write about it again in a long time. This could indicate that the interest in Iceland’s BTC mining industry is low. We do hope that this article sparked your interest and perhaps shined a little light on a huge opportunity that has not been fully taken yet.

Author picture
Frank van der Beek
Chief Editor

Frank van der Beek is the chief editor and founder of Frank is passionate about blockchain technology and its potential to empower individuals. Through Yada On The Block, he seeks to educate readers about the latest developments in the industry and help with the further adoption of Bitcoin.

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