Iceland’s abundance of renewable energy boosts Bitcoin hashrate

With its vast renewable energy resources, Iceland has emerged as a prominent Bitcoin mining destination.

However, according to new research from one of the industry’s leading watchdogs, the country has maxed out at around 120 MW of energy for Bitcoin mining, which accounts for around 1.3% of the global Bitcoin hash rate.

What makes Iceland such a mining powerhouse?

Thanks to Iceland vast water and geothermal energy sources, the country has managed to dedicate 120 megawatts of electricity to Bitcoin mining, which accounts for only 1.3% of the global hash rate. But with a population of just 370,000, Iceland is the world’s largest producer of hash per capita.

Iceland’s oversized energy dominance

With an abundance of electricity resources, Iceland is the world’s most electricity-rich country, producing almost twice as much electricity per capita as Norway, the second country on the list.

Iceland and Norway are the only two countries in the world that are completely dependent on renewable energy sources for their power needs.

The recent increase in BTC prices has increased mining profitability by 35% since the start of 2023. As the network’s hash rate reached a new high of 318 exahashes per second (EH/s), Bitcoin mining has been accelerating not only in Iceland , but worldwide.

Political stability

A large part of what makes Iceland attractive as a mining hub is that it is considered one of the most politically stable countries globally.

“Domestic companies involved in mining in Iceland include Greenblocks, Advania Data Centers and Borealis Data Center. In addition, many international players currently operate or were there, such as Genesis Mining, Bitfury, Hive Blockchain and Startmining.”

The Icelandic government supports Bitcoin mining, recognizing its potential to attract foreign investment and create employment opportunities.

However, the government has also expressed concern about the environmental impact of Bitcoin mining and has encouraged the industry to be more sustainable by adopting more energy efficient technology.

Nevertheless, some of the main players in the Bitcoin mining industry in Iceland have been operating for 10 years, largely without any significant issues from the authorities.

Iceland hits mining restrictions

The factors that make Iceland such an enticing environment for Bitcoin miners have also had an impact on supply/demand.

– Iceland’s electricity supply may have seemed endless a few years ago, but it has gradually become scarcer in recent years. Icelandic miners report that it is almost impossible to get power allocation for new data centers.”

This means that the industry has limited growth potential in Iceland and is likely to remain at 120 MW a year for the “foreseeable future”.