Following the 2018 decline in the prices of Bitcoin and other cryptocurrencies, stakeholders in Iceland believe more resources should be employed in other aspects of the emerging cryptocurrency and blockchain technology industry.

The 2017 Bitcoin Mining Mania

At the height of Bitcoin mania in 2017 when the price was surging rapidly, miners flocked to Iceland. With its rich geothermal potential and cheap energy, the Arctic island proved a haven for Bitcoin mining companies looking to make huge profits.

Thus, giants like BitFury, Genesis, etc. came into the domestic scene, outmuscling the local cryptocurrency mining enthusiasts. Such was the scale of the virtual currency mining craze that a high-profile Bitcoin mining heist even occurred at the start of 2018. In April, Dutch police apprehended the suspected mastermind of the “Big Bitcoin Heist” that saw the theft of 600 BTC mining computers worth about $2 million.

There is no consensus for the exact nature of the power consumed by cryptocurrency mining activities. However, everyone agrees that the process expels a lot of heat. Thus, the cold climate in the country plus its low electricity tariffs make it a prime location for establishing mega cryptocurrency mining facilities.

Avoiding Another Economic Collapse

In recent times, however, the massive decline in cryptocurrency prices appears to be taking its toll on the mining sector. HashFlare, a popular cloud mining platform, recently discontinued its BTC mining service.

Understandably, stakeholders in the country do not want another repeat of the 2008 financial crisis where the country’s currency plummeted by more than 60 percent. By April 2018, when the Bitcoin price was somewhere in the mid-$7000 region, some experts predicted a likely collapse of the Icelandic BTC industry.

A Diversified Cryptocurrency Economy

Stakeholders like Halldór Jörgensson, the head of the Borealis Data Center in Keflavik, believe the emphasis should be on diversifying the country’s cryptocurrency industry. Speaking to Red Herring, Jörgensson said:

The demand is shifting more towards the pure blockchain business. So, you could say that the bitcoin wave, the big wave of bitcoin demand, has helped us to build out really fast because there were really aggressive or interested parties who wanted to do things and we managed to do the build-out.

Recently, billionaire tech VC Tim Draper predicted that the global cryptocurrency market would reach $80 trillion. Already, countries like Malta are expanding their capacity building efforts in several aspects of the emerging industry. Iceland could follow suit, becoming one of the global blockchain technology hubs.

Will Iceland’s economy benefit from a more diversified cryptocurrency and blockchain industry? Let us know your thoughts in the comment section below.

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