Second-Largest European Nation is Cracking Down on Cryptocurrencies due to Power Supply Crisis

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Iceland is the largest European nation by area after the United Kingdom. The majority of the Iceland population and the commercial entities depend on power generated by geothermal plants. The national power generator and supplier called Landsvirkjun have recently reported a shortage of power reserves.

Landsvirkjun has also announced that the power supply to the aluminium smelters, data processing centres and Bitcoin mining firms will be reduced. As reported by Bloomberg, the power shortage is a direct result of depleting hydro reservoirs levels and has rendered the power generation company without any options to employ external resources for electricity generation.

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Short-Term Contract Holders are Going to Suffer from the Recent Power Outage Issue

Tinna Traustadottir, VP for sales and customer care at Landsvirkjun, recently told the media that the power shortage is going to apply to the short-term commercial contractors. It is worth noting that the biggest portion of the power supply generated by the company is allotted to the metal smelters constructed more than a decade ago in the country.

Several Bitcoin and cryptocurrency miners decided to establish their operations in Iceland to take advantage of the low electricity costs. The biggest mining enterprises include Bitfury Holdings BV, Genesis Mining Ltd., and Hive Blockchain Ltd. The requests by mining farms to purchase more power from Landsvirkjun have been denied reportedly.

The massive cryptocurrency crackdown by China has been followed by other nations like Sweden. Two Director Generals from Sweden government have recently suggested the idea of restricting power supply to cryptocurrency mining agencies. As noted by Finbold media, the total energy consumption used by Bitcoin miners yearly is estimated to be 143 TWh.

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In comparison, companies like Facebook and Google Inc. collectively require 17 TWh per annum. On the other hand, countries like El Salvador have proceeded to fund geothermal energy generation projects with Bitcoin. Recently, the South American nation mined its first Bitcoin with volcanic generator energy. The debate about the massive carbon footprint generated by Bitcoin mining is still awaiting a verdict in the broader crypto community.

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