Bitcoin Mining in Iceland? A Hot Market That’s Not Cooling Anytime Soon

The installation at Reykjanesbaer, Iceland, near the Arctic Circle, is actually ideal for a massive Bitcoin mining operation, with its reliance on cheap geothermal and hydroelectric energy.
And then there’s the much-needed natural blasts of Arctic air that runs through vents from the floor to cool 100 noisy computers, each worth about $20,000 in the extremely hot and current market for bitcoin rigs.
The New York Times has profiled Emmanuel Abiodun, 31, founder of Cloud Hashing, which rents out computing power to speculators who want to mine for bitcoins, without buying the massive and ridiculously-priced computers. This is another piece of interesting bitcoin news that shows the speedy development of the transformative cryptocurrency industry, which we could see taking precedent over traditional forms of currency soon.
Mining involves costly computer power to run graphics processing units around the clock. These GPUs solve computations, a cryptographic “hash” repeatedly until the result is what the bitcoin network is seeking. The process yields blocks of bitcoin transactions, and rewards are divvied up among miners for them to then spend. Check out to see how and where bitcoin can be spent. The procedure is repeated over and over again. Only 21 million bitcoins will be created in total, amounting to a scarcity akin to precious metals.
Bitcoin protocol increases the difficulty factor over time, in part through something called a ‘proof of work’. The bitcoin system also generates a ledger, basically a long list of blocks, known as the block chain. Its purpose is to have a record of every transaction made between any bitcoin address, at any point throughout the network.
The Times article is a compelling look at how the surging price of bitcoin this year has created a huge industry of programmers, speculators, hardware producers and start-up investors eager to jump into mining or other bitcoin-related enterprises. Some have even taken to looking into Bitcoin IRA groups to further extend their savings and retirement funds with the currency.
“Mr. Abiodun is one of a number of entrepreneurs who have rushed, gold-fever style, into large-scale Bitcoin mining operations in just the last few months,” says the Times of the former programmer for HSBC in London. “All of these people are making enormous bets that Bitcoin will not collapse, as it has threatened to do several times.”
In February, Abiodun used investors’ money to order machines from a start-up maker of specialized mining computers. But when the delay became too long, he turned to eBay and paid $130,000 for two high-powered machines. In June, he set them up in a data center in Kansas City, Kan.
But that wasn’t enough. Abiodun then ordered about 100 machines from a start-up in Sweden. In October, he had them moved to the facility in Iceland.
“In just a few months, that installation has generated more than $4 million worth of Bitcoins, at the current value, according to the company’s account on the public Bitcoin network,” the Times said.

J. Lipsky

Hello, I am John, born in Cedar Rapids, but lived a lot of years in Latin America. I am an economist and have specialized in credit and debt. Originally sovereign debt, but later on, in credit score management and debt consolidation. I write for many publications. Here in eCreditDaily, I write about credit, second chance banking, and debt. I also write for other websites and bulletins about inflation and country risk.

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