The cryptocurrency boom risks crashing Iceland’s economy
Iceland’s government worries that cryptocurrencies could severely damage its economy if their boom ends in a bust. It would be especially devastating for a country that is still recovering from the huge financial crash that crippled its economy just a decade ago. Despite being a remote volcanic island with just 334,252 inhabitants, the crypto threat “cannot be excluded as a risk factor”, says finance minister Bjarni Benediktsson.
When you think of Iceland, it’s most likely that a rugged landscape or the Blue Lagoon springs to mind. Cryptocurrency miners, however, think of a data centre haven, thanks to Iceland’s cheap and plentiful renewable hydro and geothermal power and relatively stable temperatures, which on most days provide natural cooling for the hosted equipment. In fact, most of Iceland’s energy – transport excepted – comes from renewable sources powered by the island’s volcanoes.
As the digital ‘mining’ of cryptocurrencies like bitcoin and Ethereum is extremely energy-intensive, Iceland’s cheap and green energy is a natural asset.
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