Based on its name alone, Iceland will usually evoke images of a sparse population and freezing temperatures. While nobody was watching, however, the island nation slowly became the hottest location for one of the fastest-growing industries today — the country is now recognized as the global center for crypto mining.

Perfect Weather for Crypto Mining

And it’s partly because of all the ice. Iceland’s freezing temperature, which could be very uncomfortable for humans, is actually the perfect temperature for those powerful PCs used in cryptocurrency mining. It takes a lot of power to cool down those overworked processors. But if a mining facility is located in Iceland, cooling the mining PCs won’t be a problem at all since the weather is already freezing. A company setting up its mining operations in the country would be able to save a lot on air conditioning costs compared to a mining operation located somewhere in the tropics.

Cheap Renewable Power

Aside from its cold weather, Iceland is also blessed with a very cheap power rate of only 8 euro cents a kilowatt-hour. The cryptocurrency mining process is notorious for being energy-needy. It takes enormous amounts of electrical power to get the job done. To ensure that a mining operation is as profitable as possible, it is necessary to have a mining facility with very low power rates. Iceland fits the bill. The country has one of the lower power rates in Europe. Along with a stable and reliable electrical grid, it’s no wonder that mining companies are setting up their facilities on the island. It’s all in the name of profit.

Dam on a river in Iceland. Source: shutterstock.com
Dam on a river in Iceland. Source: shutterstock.com

But the best part is that Iceland gets its energy from renewable sources. Iceland prides itself as one of the greenest countries in the world. The country’s entire electrical energy requirement is produced from renewable energy sources — 75.5 percent is from hydro, while the remaining 24.5 percent is geothermal. Since being green is now used as a metric for corporate responsibility, setting up shops in Iceland for mining operations is the best choice. Investors will sleep better at night knowing that their mining operation is churning out money without needlessly harming the environment.

Potential Competition

However, Iceland is facing some serious competition from two of its Scandinavian neighbors. With a power rate of just 6.5 euro cents a kilowatt-hour, Sweden offers rates even cheaper than Iceland. Similarly, Norway’s 7.1 cents is also lower.

The lower rates offered by these two alternative mining destinations are not lost on crypto mining companies. In fact, a number of mining firms have already put up facilities in both Sweden and Norway. Given such formidable rivals, it remains to be seen if Iceland will be able to keep its competitive advantage for long.

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