• Iceland, despite its population sitting at 370,000, has become the country with the largest hash rate producer per capita. 
• However, Iceland’s electricity is getting scarce and miners are raising concerns. 

According to a recent research carried out by the Bitcoin mining researcher Jared Mellerud, which was published on the hashrate index website, the Bitcoin mining industry in Iceland uses around 120 MV, bringing it to a share of 1.3% of the hash rate produced globally.

The country’s small population of 370,000 has done little to stop it from becoming one of the fastest-growing Bitcoin mining hubs. The country is now the largest hash rate producer per capita.

Miners in Iceland have the advantage of enjoying Iceland’s isolated electricity and combating inflation

Iceland has been home to international cryptocurrencies mining companies like Genesis Mining, Bitfury, Hive Blockchain, and Startmining. Other domestic crypto mining firms in the nation include Greenblocks, Advania Data Centers, and Borealis Data Center.

El Salvador adopted Bitcoin as a legal tender back in 2021. The move brought a lot of attention to the nation. The nation also got the crypto community talking when it introduced a volcano mining project. But researcher Mellerud insists that Icelanders have been involved in volcano mining at a larger scale for several years.

According to the research, many other countries welcome miners and provide cheaper electricity for miners to carry out mining operations, however, Iceland provides an even better incentive for Bitcoin miners. The electricity system in the region is exclusive and inaccessible to the rest of the world. This is done to keep the prices of electricity low as inflation tugs at the global economy. The research explained;

While miners can undoubtedly find cheaper electricity in other locations, one of the advantages of the Icelandic electricity system is its total isolation from the rest of the world, protecting it against global electricity price inflation. There are no interconnections between Iceland and continental Europe, and the country is not exposed to fuel prices since all of its electricity comes from renewable sources.

Lastly, the report revealed that electricity appears to be getting scarcer in Iceland as electricity demands increase. Miners in Iceland have now reported that it is almost impossible to access electricity allocation for new data centers.

By building new power plants, and increasing the electricity supply, the problem can be solved. However, there are limited plans for such build-outs, and electricity might continue to become even scarcer. The research added;

The scarce electricity means that the bitcoin mining industry has limited growth potential in Iceland and will likely stay at around 120 MW for the foreseeable future. Still, if other energy-intensive consumers were to withdraw from Iceland, miners would be ready to tap into the extra available electricity