Iceland emerges as the most stable jurisdictions for Bitcoin mining (Report)

There has been a huge transformation in the Bitcoin mining landscape since then. Different countries have become the miners’ new ports. One European country has emerged as the world’s largest hash rate producer per capita. Due to cheap electricity, Iceland is one of the first countries to see Bitcoin mining on an industrial scale.

According to Bitcoin mining researcher Jaran Mellerud, the country’s entrepreneurial space can also be that attributed to the growth of the sector. The Icelandic bitcoin mining industry is estimated to consume nearly 120 MW, which equates to a 1.3% share of global hash rate production. Considering that Iceland has a population of only 370,000, it is the largest hash rate producer per capita.

What makes Iceland special?

There are other countries where crypto miners can find cheaper electricity. In fact, electricity has historically been slightly more expensive in Iceland than in other Nordic places such as northern Norway and northern Sweden. So what makes Iceland a lucrative place?

A crucial advantage, as pointed out by Mellerud, is the fact that the Arctic nation’s power system is totally isolated from the rest of the world. This clearly protects the players against global price increases for electricity. On top of that, there are no interconnections between Iceland and continental Europe, which prevents the former from being exposed to fuel prices since all the electricity comes from renewable sources.

Miners have operated in the region for nearly ten years without any significant issues with the regulatory watchdogs, potentially making it the most stable Bitcoin mining jurisdiction in the world.

Mellerud said:

“El Salvador may have gotten the most attention in the Bitcoin community from the volcano mining project, but the Icelanders have been quietly mining volcanoes on a much larger scale for several years.”

Second line of defense

Iceland’s electricity supply has become scarcer in recent years. The development of new power plants also appears to have stagnated. As a result, power allocation for new data centers has become almost impossible.

This can be fixed by building new power plants. But there are very limited plans for such development. Iceland is powered by volcanoes and waterfalls, making it the most electricity-rich country in the world. Therefore, electricity is expected to remain cheap as hydropower and geothermal energy have very low marginal production costs.

Another line of defense miners in the tiny European country have against rising power prices is long-term fixed-price power contracts.