Bitcoin mining is using as much power as 5,699,560 American households.

Power plant in Iceland
CC BY 2.0 Power plant in Iceland/ Lloyd Alter

It creates as much CO2 as a million transatlantic flights. Why isn't this a bigger deal?

Here on TreeHugger, we have spent a decade telling people to buy efficient light bulbs. Meanwhile, people who mine bitcoins are using more electricity than all of New Zealand, perhaps 42TWh in a year. It's a feature, not a bug; as Alex Hern of the Guardian wrote,

Burning huge amounts of electricity isn’t incidental to bitcoin: instead, it’s embedded into the innermost core of the currency, as the operation known as “mining”. In simplified terms, bitcoin mining is a competition to waste the most electricity possible by doing pointless arithmetic quintillions of times a second.

Lately, those bitcoin miners have been chasing cheap and dependable electricity around the world, with Iceland being the hot cool spot, thanks to lots of real geothermal and hydro-electric power and only 340,000 people to use it. The Wall Street Journal's Zeke Turner writes a long article about the impact of of this on the country, and looks at all the companies that are building data centres, listing companies like BMW who need a lot of processing power to run crash test simulations, banks and life sciences companies.

Tourists in IcelandTourists in Iceland /CC BY 2.0

But there are problems; environmentalists are complaining that all these power plants might muck up the biggest industry in Iceland: Tourism.

“When you get down to it you are dealing with extremely rare and beautiful places, delicate places,” said Andri Snaer Magnason, a poet, activist and third-place finisher in Iceland’s last presidential election. “The expansion of the current grid is quite painful.”

Other more successful politicians have complaints too.

Guthmundur Ingi Guthbrandsson, Iceland’s new Yale University-educated environmental minister, is urging caution. “Electricity already produced should be used more efficiently. That is goal number one,” he said.

But buried in the second-last paragraph of this entire article is the key point:

One particular concern is cryptocurrency mining—a processor and electricity-intensive computing process for generating currencies such as bitcoin. The process accounts for about 90% of Iceland’s data center industry in terms of electricity consumed, according to the KPMG study.

As always, I recommend that you never read the comments on the Wall Street Journal, which in this case are entirely an attack on environmentalists for complaining about green power. I think this was a setup by the author, given the quotes from "a poet, activist and third-place finisher". But at least one reader got to the end of the article and noted:

So when this silly cryptocurrency bubble bursts, Iceland will suddenly lose 90% of the electrical demand that the greenies are so worried about? Seem to recall the country went pretty much bankrupt a few years ago.

That was the banking crisis. Before that, there was a fishing crisis.

“In the past our eggs have tended to be in one basket,” said [private utility] HS Orka spokesman Johann Snorri Sigurbergsson, referring to Iceland’s earlier focus on fisheries and the smelting industry. “Data centers for us are adding to the diversity in our client portfolio.”

energy consumption bitcoin miningDigiconomist/Screen capture

But surely, if 90 percent of your output is going to bitcoin, all your eggs are again in one basket. Environmentalists everywhere should be getting loud about the issue of cryptocurrencies; right now, according to the Digiconomist, making them is creating 30,162 kilotons of CO2 per year, and using enough electricity to power 5,699,560 American households.

Why isn't this a bigger issue?

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