Blockchain in Iceland

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Blockchain in Iceland

Iceland has turned very attractive for the blockchain operators, mainly due to the abundance of power at economical rates. Electricity is very critical for blockchain since computers draw excessive power during operations. They get heated also in the process and Iceland’s naturally cold climate takes care of this as well. Blockchain is an activity aimed at mining cryptocurrency. These favorable conditions for blockchain in Iceland have resulted in the business booming here. Interestingly bitcoin is banned for use in Iceland.

Highly Dependent on Bitcoin Prices

Bitcoin is the most popular cryptocurrency though others get traded on virtual agencies. The prices of Bitcoin have been fluctuating widely in the exchanges and those involved in the blockchain business depend heavily on the price of Bitcoin. They spend hours mining the cryptocurrency and once they have the currency, they can trade it and make money. They will have to invest heavily in high-powered computers to do the cryptocurrency mining. Handling blockchain in Iceland would mean a lesser cost towards electricity consumption. However, there are costs involved and ultimately generating profits is one of the main objectives in any business.

Blockchain in Iceland

High Power Use Can Come Back to Hit the Business

It is a well-known fact that blockchain in Iceland consumes a lot of power. This has been confirmed through various reports. One report by KPMG says out of all the power consumed by the datacenters in Iceland, 90% was used up by the cryptocurrency mining companies. Another piece of information comes from one of the major power producers in Iceland, HS Orka. The company claims that the quantum of power consumed by the blockchain units in the country exceeded the amount used for heating all homes in Iceland. This kind of imbalance can result in the government becoming alert and increasing the power tariffs for blockchain operations to much higher levels than currently charged. This can have a negative impact on the industry and some may think of winding up the units.

The Icelandic Blockchain Foundation

The advocates of blockchain technology in the country have formed their own body, the Icelandic Blockchain Foundation. The objective of this body is to keep people informed of the positive impact that blockchain technology and cryptocurrencies can have on the country’s economy. It has taken it upon itself to educate the people on the blockchain. They have created or gathered educational videos that can be used to inform those interested in how blockchain works. The videos will have details of the different cryptocurrencies. The Foundation has also formed internal groups to deal with issues like legislation on cryptocurrencies and liaise with the government.

The Future of Blockchain

The future of blockchain in Iceland is largely linked to the way Bitcoin gets traded and the benefits the mining of the currency can bring to their kitty. Iceland has banned the use of Bitcoin as a tradeable currency in Iceland. The government wants to protect the gullible citizens from falling prey to the lure of making fast money. A lot of people in many countries have in the past lost their fortunes in dealing with cryptocurrencies.

Blockchain in Iceland

Those doing cryptocurrency mining through blockchain can store their currencies and do trading online on virtual exchanges. They can then convert them to ISK and get credit in their bank accounts.

Blockchain technology is used in other areas beyond just cryptocurrency mining. If the Iceland companies can diversify into these areas and reduce their dependence on cryptocurrencies, there can be a better future for them. No one has been able to predict the future of cryptocurrencies. The negative part of it is that it is not backed by any solid asset. A currency like dollar is backed by an inventory of gold.

 

For any assistance in Iceland contact Swapp Agency.

 

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