“When Miner is Knocking at Your Door”: How Mining Industry Influences Host Countries?
Mining cryptocurrencies has already become a gross industry, but what happens when miners start a company in your town?
There are hundreds of cryptocurrencies with prices for most of them having risen rapidly over the last three years which has made the business a profitable one.
Processing transactions implies enabling computational capacity on industrial scale for complex algorithms. It must guarantee that creating new blocks is complicated and limit the supply. However over the last years corporations build large crypto mines with hundreds of computers in one building to mine digital currency faster. These data processing centers consume lots of power.
Many mines were opened in Iceland lately. A crypto mine has deployed in the building that used to be a vehicle service at the US military base near Reykjavik among dozens of warehouses in the middle of wastelands.
So, why Iceland? Computers run hot and must stay cool which can be a costly task. Fortunately for Iceland, it is well prepared to handle this: there is no need in cooling due to the country’s natural climate which regulates internal heat of mines from outside. This means there is no need in wasting money for cooling that is the №2 budget item for mining farm.
The process of running computers is highly power-consuming. Iceland, however, has got almost unlimited energy storage underground. The small country owns a number of geothermal power stations that make use of geothermal sources for work turbines to produce huge amount of cheap energy.
“By the end of this year, data centres in Iceland will use more electricity than all the homes in Iceland combined,” Johann Sigurbergsson from HS Orka geothermal energy company notes.
This means that so far cryptocurrency mines are no big problem for Iceland which takes 100% of electricity from renewable resources.
The situation is different in Plattsburgh, NY. Mines influence the city financially so much that the mayor declared crypto device development banned temporarily.
“Right now, they’re already using upwards of 15 to 25% of our power in the city on a given day. Not only do they use an incredible amount of power, but there’s an awful lot of unintended consequences that have never been dealt with,” Plattsburgh mayor Colin Read said.
Flaws outbalance positive results for Plattsbutgh. As mines are automatized, few people are required to control them. In addition, due to high-speed nature of crypto business company owners tend to rent facilities rather than buy them so the city receives no real estate taxes.
“I’m a big fan of cryptocurrency, but Plattsburgh needs to figure out how to address the problems it’s currently facing with regard to cryptocurrency mining before lifting the ban and welcoming miners back into the city”, Read admitted.