In an interview with the Financial Times, Prime Minister of Iceland, Katrín Jakobsdóttir, hinted at a plan to divert the country’s renewable energy resources. The focus will now be on boosting food production rather than supporting the crypto-mining industry. This move is concerned with increasing food independence as well as creating a wider grid where renewable energy from power production can be utilized all across the households and different industries in Iceland.
Iceland, which prides itself on its huge hydroelectric and geothermal power plants, has turned out to be one of the top energy exporters per capita. These green sources of energy became the main reason that the country is among the world’s leaders in the production of Bitcoin hashrate. However, the government now seeks to prioritize other sectors over crypto mining.
Crypto Mining Dilemma
One of the aspects that has brought to the limelight, Iceland‘s renewable energy sector is that it has not only positioned itself as a leading green power producer but also as a preferred destination for crypto miners across the globe. While the upside of such technology is unmistakable, the Prime Minister stressed the energy waste of data centers being used by Bitcoin and other cryptocurrencies. Along with an evolving demand for electricity and a lack of new power plants being built, Iceland finds itself in the position of having to deal with a deficiency of energy.
According to Luxor, an industry research institute, the leading reason for the absence of any crypto-mining expansion in Iceland is this energy shortage. Moreover, the upcoming Bitcoin block reward halving has stirred a global shift in the crypto-mining landscape. In the last decade since Bitcoin was created, mining rigs not only moved out of the U.S. to the regions where energy costs are lower, like Africa and South America but also improved themselves in terms of efficiency, which boosted profitability.
Global Mining Shifts and Iceland’s Agricultural Aspirations
As the crypto mining industry advances, energy prices become a factor for launching new centers operating with crypto mining. Countries like Ethiopia, Tanzania, Paraguay, and Uruguay now provide investors with a suitable place for Bitcoin mining companies. This type of economy of these areas comes with lower operating costs; therefore, they become viable for post-halving times.
Meanwhile, Iceland is looking inward, with the Prime Minister’s push towards agriculture marking a significant pivot. Through the initiative, the concepts of import substitution and domestic benefit using renewable energy are clearly reflected. Through this strategy, not only is the stable energy supply of Iceland ensured until future times, but also, the food independence of the country in the face of global adversities is strengthened.
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