Iceland to Slow Down Bitcoin Mining as Electricity Demand Surpasses Household Use

By Jody McDonald March 25, 2024 In Bitcoin, Bitcoin Mining
  • Iceland’s PM, Katrín Jakobsdóttir, wants to redirect electricity used in mining Bitcoin towards increasing corn production.
  • Jakobsdóttir said the growing trend toward isolationism and reduced agricultural exports from EU nations posed food security risks for Iceland.

Iceland’s Prime Minister, Katrín Jakobsdóttir, has said the small Nordic nation was looking to reduce the amount of electricity it dedicates to Bitcoin mining, instead redirecting energy into agriculture—in particular corn production. Jakobsdóttir’s comments came in an interview with The Financial Times published on Saturday. 

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Iceland currently expends more energy mining Bitcoin per capita than any other country on earth. Jakobsdóttir said the situation was unsustainable, emphasising that the island nation needed to prioritise its long-term food security and self-sufficiency over financial gain.

Iceland’s Cheap Renewable Energy Attracts Bitcoin Miners

Iceland has become something of a go-to destination for Bitcoin miners over the past few years. Its plentiful hydroelectric and geothermal power plants have made it the number one producer of electricity per capita in the world, which in turn has made electricity very cheap.

Source: Hashrate Index 

However, the growth in Bitcoin mining in Iceland—which now uses more electricity than all the nation’s households combined—contributed to electricity shortages last winter. 

The power shortages got so bad that fish processing plants were forced to turn to diesel and oil to keep the lights on, a situation the nation’s environment minister, Guðlaugur Þór Þórðarson, described as “unacceptable”.

Jakobsdóttir said Iceland’s precious electricity should be going towards ensuring food security for the nation’s 375,000 citizens, not mining cryptocurrency, “Bitcoin is an issue worldwide . . . but data centres in Iceland use a significant share of our green energy.” 

Foods Security Vital In Face Of Growing Isolationism 

Iceland’s concerns about food security come as EU nations such as France and The Netherlands, on which Iceland depends for much of its agricultural imports, look to cut back on farming in order to meet their carbon emissions targets.

Food crops, in particular, are a huge problem for Iceland. The nation currently produces only about 1% of the cereals, and about 43% of the vegetables it consumes—relying on imports to make up the balance.

Of course, crop production is always going to be an issue in Iceland, where sub-zero temperatures and limited sunlight make it hard to grow plants. But Jakobsdóttir said corn can be successfully grown there:

One of the things that we are starting is to grow corn in Iceland, which hasn’t been done systematically, even though it’s possible.

Katrín Jakobsdóttir, Prime Minister of Iceland

Related: Analysts Discuss Sluggish Spot Bitcoin ETF Performance Amid Market Fluctuations

Jakobsdóttir also pointed to “a trend for isolationism in the world”, which could eventually force Iceland into a position where it needs to meet its food needs itself. 

As great as it is, you can’t eat Bitcoin I suppose.

Jody McDonald

Jody McDonald

Jody is a Brisbane-based freelance writer who specialises in writing about business, technology, and the future of work.

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