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Iceland is the world’s bitcoin farm

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In the heart of the Icelandic lava fields stands one of the largest bitcoin factories in the world. A high-tech workshop that produces virtual gold, the site is ultra-secure and its precise location is kept secret to avoid covetousness. Thanks to its basements full of hot water that provide abundant and cheap electricity, Iceland has become a paradise for “miners” of cryptomoney such as bitcoin, emitted by servers as powerful as they are energy-intensive.

Unlike the dollar or the euro, Bitcoin is not issued by central banks but “mined”, or created in computer “farms”. In the Icelandic volcanic desert, a seemingly innocuous-looking silver shed houses machines, nearly four other buildings and soon two brand new warehouses will be added. This “farm” of the Genesis Mining company bears the dubious name of the first encryption machine, Enigma, used by the Nazis during the Second World War.

Inside the hangar, tens of thousands of mining rigs line up on 400 square meters, creating a stunning humming sound similar to that of a jumbo jet taking off. A mining rig is a kind of central processing unit with a motherboard, RAM memory, hard disk, processor and six graphics cards.

What does it do? Execute complex algorithms to record a succession of authenticated and encrypted transactions. This technology called the “blockchain” is often described as the digital equivalent of an account book that would be unbreakable and unforgeable. In total, 12.5 bitcoins are created every 10 minutes in mining farms.

Iceland indeed offers unique conditions in the world for the production of cryptomoney, because of its cheap and 100% renewable geothermal energy. The kWh before tax (0.065 euro) is on average half as expensive as in the European Union (0.114 euro), according to Eurostat data for 2016, making Iceland one of the most competitive nations in Europe behind Serbia, Macedonia and Bosnia.

And the average annual temperature on the island is about 5°C. This is ideal to avoid overheating, and perfect for mechanically limiting the need for energy consumption. The polar wind is sucked in by a battery of fans, then filtered and mixed with the heat released by computers – up to 80°C – to maintain the temperature of the mining stations between 5°C and 25°C.

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