Cryptocurrency Mining – Why Iceland Is The Ideal Place

Blockchain, FinTech, ICO News, Investing, Regulation | July 3, 2018 By:

The advantages to using cryptocurrency are abundant, but some experts remain concerned over the impact mining will have on global economies. Crypto-mining serves two main purposes: Adding transactions to the blockchain and releasing new forms of cryptocurrency. The process can be taxing on computer generator systems because it requires a certain amount of energy and power.

The question of where to go in order to better serve the financial ecosystem is what troubles financial leaders, but those looking into Iceland should pay even closer attention. Crypto-miners are constantly searching for ideal circumstances to maximize their profits – and Iceland is the number one choice based on environmental factors, new regulation amendments and economic sustainability.

As a founding Board Member of The Icelandic Blockchain Foundation, creator of the only Icelandic crypto-exchange, and founding team member of two successful crypto-startups (e.g., Svandis, Auroracoin), I see all types of miners. The largest of all data centers operating in this space is Advania Data Centers. However, we see varying sizes of companies and individuals operating rigs. I have witnessed some of the most impressive setups being done just by individuals, somewhere in an apartment downtown Reykjavik, for instance. Iceland is welcoming to foreign entities doing as such. However, with a small population, there are only one or two central power utility companies and, thus, they are keen on ensuring they know who is requiring such high energy use. The days of sending a shipping container to Iceland with a mining operation inside, hooking it up to a strong power supply, and just letting it run are over – but we believe that’s a good thing.

Location, Location, Location

Much like real estate, crypto mining is all about “location, location, location!” Iceland is located at the northernmost tip of the Mid-Atlantic Ridge, which means not only a cooler environment, but also one that serves as a cost-benefit for miners. Less money needs to go into the high-powered units used to cool down the servers generating these cryptocurrencies. Moreover, data centers operating mining equipment experience major cost burdens in climates of variability, e.g., regions with very cold winters, but hot summers.

The systems emit a tremendous amount of heat to run at full capacity and Iceland’s environment is ideal for running these units as efficiently as possible, especially when concerning the renewable energy sources afforded to the country – namely, volcanic activity.

The Powers to Regulate

Thus far, the Icelandic government has only passed a KYC/AML bill requiring companies that hold wallets on behalf of customers, exchanges, ATMs, etc., to register with FME (the Icelandic SEC). The Ministry of Justice proposed a new amendment to the current anti-money laundering regulation that involves the first definition of cryptocurrencies into the Icelandic law.

It is not clear if the bill will pass before the summer break, but if it does, all businesses that offer exchange services will have to register with the FME (The Financial Supervisory Authority) within one month of the law passing. It is essential to pass legislation that impedes illegal activity, and we have to make sure that the regulation is fair and not a burden to people and businesses innovating in this space.

The Myth of Crypto-Economic Turmoil

Overall, cryptocurrencies have a way of creating a more sustainable economy because of their accessibility and relatively low transaction fees. Crypto-mining is part of the blockchain process and should be looked at as a positive as well.

When it comes to new ideas, especially in the form of a digital currency, experts are cautious on their ability to instigate growth – especially when not vetted properly. Iceland puts itself at one of the greatest advantages because of its friendliness toward cashless societies and advancements in technology.

Final Thoughts

Coming up with new crypto units involves using computing power on an industrial scale to solve complex algorithms. Recent news claims the crypto boom could crash Iceland’s economy, but their stability is a leading example of how important crypto mining is to the tech community. Iceland is not only the ideal place for data centers, but one that should serve as an example to the benefits of having a positive attitude toward digital assets – and digital access!