Several countries across the globe are facing power shortages because of the large amount of cryptocurrency mining activities. Iceland is one of those countries facing power shortages because of the increasing number of cryptocurrency mining activities in the country’s geographical boundaries.
Recently, the company providing electrical services to the whole country named Landsvirkjun rejected the applications from new cryptocurrency miners. The rejection came amid the decreasing power production in the country. The company executive said that there had been many cryptocurrency activities in the country, taking up massive power consumption.
Due to this, the company has to reject the applications from several cryptocurrency mining firms which are new in the field. However, it is not only the cryptocurrency mining firms whose application for more energy is directed but also other industries. Earlier, Iceland was not a very well-suited area for cryptocurrency mining companies.
However, cryptocurrency mining firms are attracted to it due to the recent decrease in electricity prices. Due to the increasing number of cryptocurrency mining companies, the country has already faced a power shortage.
However, recently, the electricity demand has increased due to cryptocurrency activities, an aluminium smelter, and centres. The electricity providing company Landsvirkjun stated that the main reason behind the shortage of power is the malfunctioning of a power station.
In addition, there were also lower hydro Reservoir levels, and the outside provider of the company is also not producing the required amount of electricity.
Overall, these factors led to the shortage of power supply in the country, and the application for more electricity by new cryptocurrency miners was rejected.
On why governments should not regulate bitcoin, there was an interview between the news reporters and the executive of the company Landsvirkjun which supplies power to the whole country. She said that the country had been a hotspot for the companies dealing in cryptocurrency mining services because of the low cost of electricity.
The main reason behind the power supply abundance in the country is geothermal energy. There is a huge source of geothermal energy in the country, which is making the electricity supply cheaper, and the miners are attracted to it.
Some top-rated cryptocurrency mining firms are attracted towards the country, as a company from Canada named Hive Blockchain Technologies Ltd. Apart from this, there are others like Genesis mining Ltd from Hong Kong and many more.
There was a rejection of the companies that demanded more electricity for cryptocurrency mining on December 7. The action came due to the country’s lower supply and production of electricity. The cryptocurrency mining companies were harnessing a large amount of renewable energy at very cheap rates, which led to the shortage of energy at this point.
Earlier, there were a lot of cryptocurrency mining firms attracted towards the massive atmosphere of the country, which was favourable for mining operations due to the lower cost of electricity.
Also, other factors like cheap availability of labour and higher technology availability led to the increase in cryptocurrency mining activities in the country.
It is not the first time that cryptocurrency mining operations are creating huge hindrances in the daily activities of different countries. It is the ice facing power shortage because of the cryptocurrency mining activities and others. Kazakhstan was one of the most popular countries which have become the hotspot for cryptocurrency mining operations after the mining ban in China.
Huge multinational companies making cryptocurrencies through mining shifted from China to Iceland and Kazakhstan, which led to the power shortage to a large extent. The directors of Sweden also proposed banning cryptocurrency mining operations due to the increasing climate degradation.
Because of the increasing concerns about the climate, many countries will regulate cryptocurrency activities within the geographical boundaries of their nation.
In November, Bitcoin became the most popular and highest price cryptocurrency by reaching $69,000.
However, the price stability was not for a long time, and it started to decline immediately after reaching the highest mark. It reached the highest price and then started to decline, and now it is standing at a price of around $50,000.
The market is expected to fall further if the price does not recover soon. The main reason behind it is discovering new Omicron and other factors like adopting different coins.