When people first hear about the Bitcoin mines in Iceland, it must conjure up mental images of deep caverns of ice, where men travel into the cold deep underground. At least it did for me!
It isn’t quite that mystical, or dangerous thankfully, but there is an earnest search for the new electronic gold called Bitcoin.
For those who don’t know what Bitcoin is, Bitcoin is a distributed, worldwide, decentralized digital money. Bitcoins are issued and managed without any central authority whatsoever: there is no government, company, or bank in charge of Bitcoin. As such, it is more resistant to wild inflation and corrupt banks.
The Bitcoin mines in Iceland are located on the flat lava plains within the municipality of Reykjanesbaer, which is near the Arctic Circle on the southern peninsula of the country. The Bitcoin mines themselves are a series of specialized computers that create Bitcoin currency. The computers are kept inside a high security facility with fortified gates and surveillance cameras.
This “mine” is essentially a warehouse structure nestled within a small industrial park. Its white corridors, full of computer servers and processors that store data, are brightly lit. The warehouse is kept hospital clean.
If you were going to try and gain access to the inside of this building, you’d first have to pass through a fortified gate, check in with a security guard, and together you would go through several additional security checkpoints.
Eventually, you’ll make it to a fluorescent lit room that is the center of the whole operation, the room where hundreds of computers whir and glow. They’re all locked inside cabinets that have vents with Arctic cool air blowing through them. That way the computers don’t overheat from being powered on all the time.
The computers inside a Bitcoin mine are not like ordinary computers. These are custom built machines that each run the Bitcoin open source software program. And they work non-stop, day and night, hungrily crunching on complicated algorithms and mathematical equations.
Every time the computer comes up with the right answer to these problems, the decentralized network of the currency releases 25 new bitcoins. This network has been programmed to create 21 million bitcoins in total, and more than two-thirds of the total 21 million bitcoins that will ever exist are now in circulation.
Iceland is the perfect location for these Bitcoin mines. The entire country uses 100% renewable energy to power all of its homes and businesses. They do not depend on fossil fuels like most of the civilized world! Instead, their main source of power is geothermal energy, and it works quite well to power the computers there.
Another reason Iceland is great for Bitcoin mining is because it is a cool environment. The computers that generate Bitcoins produce a lot of heat, so a cool environment in needed to prevent overheating. That’s why the mining facility is strategically set up near the Arctic Circle. This allows the natural Arctic air to blow inside of the facility and into the computer area, while keeping all of the computers cool.
And since all of the computers are powered through renewable energy, the cost of electricity is dirt cheap for the mining operators. This guarantees the success of the mining and prevents the chance of any financial catastrophe from occurring which could eliminate the operation and downgrade the currency.
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