Energy Riches Fuel Bitcoin Craze For Speculation-shy Iceland (apnews.com)

Iceland is expected to use more energy "mining" bitcoins and other virtual currencies this year than it uses to power its homes. From a report: With massive amounts of electricity needed to run the computers that create bitcoins, large virtual currency companies have established a base in the North Atlantic island nation blessed with an abundance of renewable energy. The new industry's relatively sudden growth prompted lawmaker Smari McCarthy of Iceland's Pirate Party to suggest taxing the profits of bitcoin mines. The initiative is likely to be well received by Icelanders, who are skeptical of speculative financial ventures after the country's catastrophic 2008 banking crash. "Under normal circumstances, companies that are creating value in Iceland pay a certain amount of tax to the government," McCarthy told The Associated Press. "These companies are not doing that, and we might want to ask ourselves whether they should."

Comments

Whats new?

[Bert64]

People are already taxed on the profits they make from selling bitcoin...
Taxes are already levied on the hardware purchased for mining bitcoins, and the power consumed to operate the hardware.
Any extra tax which singles out bitcoin differently from any other legal activity

“We are spending tens or maybe hundreds of megawatts on producing something that has no tangible existence and no real use for humans outside the realm of financial speculation,” he said. “That can’t be good.”

There are MANY financial trading companies doing exactly the same thing, and have been doing so since long before bitcoin came into existence.

Re:Whats new?

[MrL0G1C]

People are already taxed on the profits they make from selling bitcoin...

Get real, they will be tax haven based.

Taxes are already levied on the hardware purchased for mining bitcoins,.

Not all locations have sales taxes, you don't think they bought their custom ASICs or GPUs in Iceland do you? Anyway I don't know how it works in the whole world but in the EU corporations don't pay sales taxes.

and the power consumed to operate the hardware

But will they be around for long enough for the generating capacity to be paid for?

There are MANY financial trading companies doing exactly the same thing, and have been doing so since long before bitcoin came into existence.

Financial companies tend to be in it for the long term and their server power usage is nothing like that of bitcoin miners.

Re:Whats new?

[Anonymous Coward]

"There are MANY financial trading companies doing exactly the same thing" - And their profits are also taxed, yep. You're making the argument for the tax, it's really not a new idea either.

Re:Whats new?

[Paradise Pete]

Anyway I don't know how it works in the whole world but in the EU corporations don't pay sales taxes.

You're saying that if a corporation buys, for example, a desk, there's no VAT or sales tax in the price? That they would get a better price than an individual would?

Re:Whats new?

[Anonymous Coward]

They claim the VAT back against VAT they charge on their goods/services. That's why its called a 'value added' tax

Re:Whats new?

[Anonymous Coward]

They deduct it from the tax they should pay on their sales.
Consider the meaning of value added tax. If I need the desk to do y job, it is a business expense.

Re:Whats new?

[Anonymous Coward]

Yes,

Or rather they can balance VAT going in to VAT going out.

So the net result is that they don't pay VAT, but they need to actually sell something (goods or services), otherwise everyone would start a small photo-firm and buy all computer/camera/printers for family use via the company.

Is there VAT on every instance of purchase in the US? Like if a Company sells chairs, do they pay VAT on the planks? And does the sawmill pay VAT on the logs?
 

Re:Whats new?

[Anonymous Coward]

Short answer: Yes
Long answer: They pay the VAT when buying, get some back when selling and the difference is to be paid/or reimbursed by the state.

see:
http://www.smarta.com/advice/a...

Re:Whats new?

[MrL0G1C]

Pretty much yes, it's slightly more complicated, some companies pay the tax and then claim it back.

https://www.investopedia.com/a...

But it does look like it can only be offset against vat charged to customers, so I guess these companies would simply have to buy from vat&sales tax-free regions like some areas in the US. They'd likely be paying sales tax based upon where the company making the hardware is based, they mostly won't be using middle men. Gamers Nexus was told by a GPU card manufacturer that the crypto-miners avoided slow shipping times by filling jumbo jets with gfx cards in order to reap early-bird profits.

Re:Whats new?

[JaredOfEuropa]

EU Companies pay VAT, but there's more than just their purchases involved. When they buy something, the tax they pay* is offset by the sales tax they collect from their own sales (which they have to transfer to Internal Revenue). Example with a 10€ VAT: a metalworker buys €100 worth of steel stock and pays €10 VAT on that. He turns that steel into iPhone SIM ejector pins and sells those for €200, collecting €20 VAT on those sales. Each month, he deducts the VAT he paid from the VAT he collected, and sends the balance (€10 this month) to the tax collector, effectively paying VAT only on the value he added. Hence the name: Value Added Tax.

So yes: they get a better price on stuff than an individual would, but they get taxed on whatever value they create with it.

*) In many cases, companies have the option to not pay VAT to their suppliers. In this case our metalworker would not pay €10 to his supplier, but would pay €20 to the tax man. The total tax paid is the same; the idea is to simplify bookkeeping somewhat.

Re:Whats new?

[dwywit]

People are already taxed on the profits they make from selling bitcoin...
Taxes are already levied on the hardware purchased for mining bitcoins, and the power consumed to operate the hardware.

Do you have citations for these claims? Do you have relevant links to icelandic law and policy to support your assertions?

No? Then shut up.

Any extra tax which singles out bitcoin differently from any other legal activity

A government may tax anything it wishes, consistent with its legal framework - so what's your point?

Re:Whats new?

[Hal_Porter]

But it does look like it can only be offset against vat charged to customers, so I guess these companies would simply have to buy from vat&sales tax-free regions like some areas in the US.

At least in the UK if you import stuff from outside the EU you need to pay VAT

https://www.gov.uk/guidance/va...

If there's customs duty (tariff) you'd have to pay that too

https://www.gov.uk/goods-sent-...

It's the same in other EU countries

https://travel.stackexchange.c...

Incidentally personal belongings usual don't count. The rules on this are a bit vague though - I've flown all over the place with a laptop and no one has demanded VAT or duty on it. It's rumoured that so long as you don't have the original box you're OK, but it's probably really up to whether customs catch you and whether they think it's a personal possession or something you intend to sell. It also seems like if you fly with something it's mostly ignored but if you post it will almost always get clobbered for VAT, duties and a handling fee from the shipper.

Now Iceland is in the EEA but not the EU. But I bet the EU impose EU VAT rules on them. Also arguably even a country that wasn't in the EU wouldn't allow people to avoid VAT by buying things abroad. I.e. I bet the UK keeps the same sort of rules on VAT from non EU countries to keep collecting VAT. And probably the same rules on VAT from EU countries too, because the UK doesn't want to have additional trade barriers for EU/UK trade.

Re:Whats new?

[Anonymous Coward]

No, they aren't. Have we all forgotten the Panama papers already? Rich financiers don't pay taxes.

Re:Whats new?

[Luckyo]

Based on your long answer, short answer is in fact "no". You shouldn't lie and then debunk your own lie in next two lines.

Re:Whats new?

[Anonymous Coward]

That's just plain wrong

Re:Whats new?

[viperidaenz]

It's just plain right.
Sales tax is only collected once. If companies couldn't claim back sales tax, every reseller and manufacturer in the supply chain would collect more and more tax.

As an extreme example if companies couldn't claim back the difference with 20 entities in the supply chain and 15% sales tax, if each one sold their goods for $1 more than they bought it for, the end cost to the consumer would be $118, with $20 of profit going the 20 companies and $98 going to the government as tax with an effective tax rate of 480%

Re:Whats new?

[viperidaenz]

they get a better price on stuff than an individual would, but they get taxed on whatever value they create with it.

They pay the same price as everyone else. They only need to collect sales tax on the value they add.

If an individual bought the same thing as the company and later sold it for the same price, they would make more money*, as they don't have to pay the sales tax.

* as long as they are under the threshold of having to collect VAT

eg:
VAT is 15%
Supplier sells $10 item for $11.50 incl VAT

Company on-sells for $23 incl VAT and makes $11.50 profit. Must pay $1.50 of the $3 VAT they collected. Profit after VAT is $10.
Person on-sells for $23, makes $11.50 profit. Pays no VAT.

offtopic: If construction was anything like programming, an incorrectly fitted lock would allow arsonists to come in and burn down the entire building... because there are arsonists just wandering around the streets, checking every lock because it's fun to burn down buildings.

Re:Whats new?

[Bert64]

Not all locations have sales taxes, you don't think they bought their custom ASICs or GPUs in Iceland do you? Anyway I don't know how it works in the whole world but in the EU corporations don't pay sales taxes.

If they aren't bought there, then Iceland will be charging them import taxes when they bring the hardware into the country...

Financial companies are all about short term gains, and financial trading has ruined many other businesses by forcing them to concentrate on short term gains that make the financial traders happy rather than long term benefits that could give the company stability.

Re:Whats new?

[MrL0G1C]

Financial companies (mostly) don't buy 10s of thousands of graphics cards and run them full throttle 24/7. What you're calling short term is long term for these crypto miners, There really is no comparison, apples and oranges.

Crypto-currency mining is fly-by-night

[MrL0G1C]

Iceland has every reason to be wary, mining algorithms and technological advancement ensure that whatever equipment you have will be obsolete soon enough. The crypto-mining company might still exist in a year or two but it might not. These companies run on a month-by-month basis and they'll happily up sticks and move to another country if the electricity is cheaper.

If they're not making sure that these crypto mining companies pay for the electricity generating equipment then they could easily be left with big generating capacity and no customers to use it and pay for the loans that were made to build it.

Re:Crypto-currency mining is fly-by-night

[Zocalo]

While there is some massive centralised hydro and thermal power generation in Iceland (they smelt bauxite to aluminium, which uses a lot of power), data centres - even for mining - in Iceland are nothing new; this is just people late to the party catching up with the early adopters. In Iceland's major urban locations, mostly around the Reykjavik/Keflavik area and the handful of other larger towns, the DCs are often connected to the local power grid, but the more serious players in the cottage DC industry they have are actually setting up their own power generation on a convenient thermal outlet or suitable river. Iceland's on-grid electrical supplies may be cheap, but the breakpoint for DIY being even cheaper is also surprisingly low so the risk of Iceland being left with a lot of excess capacity (which could easily be redirected to smelting, or other uses) is probably fairly low.

There's a fairly recently built DC facility like this near Gerdi where the Thorbergssetur "Bookshelf" building is, just up the N1 from Jokulsarlon (the glacial lagoon) towards Hofn, that was put in by an enterprising local farming family, if you're in the area and want to get an idea of what the typical installation looks like. No idea how much, if any, of its capacity is used for mining though.

Re:Crypto-currency mining is fly-by-night

[angel'o'sphere]

There were plans to connect the icelandic grid to the EU via Scottland ... however with the BREXIT going on tjose are on hold. They likely get reactivated after the Scotland went independent and rejoins the EU. That would in the long run give Scotland the option to beccome a majour power hub, based on interconnects to Icelands, Faroer and Norway - and their options to upgrade water and wind power significantly.

Re:Crypto-currency mining is fly-by-night

[Rei]

Actually, most Icelanders are rather wary of that scheme. The big issue being that it will raise our power rates. It would be worth it if the revenue from those power sales would go to the general public (offsetting taxes), but we have way too much history with corporate dealmaking here to buy into such a story. The other issue is of course that it means a mass expansion of power generation infrastructure. If it were just wind and geo, I wouldn't have an issue, but (again, as history consistently tells) they'll just build giant dams, destroying our highlands one canyon at a time.

This article's title, BTW, that Iceland is "speculation shy"... if only it were true. Iceland is, and probably always will be, a country that goes through one bubble after the next, always hopping head-first into the next get-rich-quick scheme with little to no advance planning or caution. Not that there are parties (including the aforementioned Pirates, to which Smári belongs) who would take a more cautious, you-really-should-think-things-out approach. But so long as Sjálfstæðisflokkurinn gets in power - and they virtually always do - "due caution" will not be in the government's vocabulary. And there's all too many parties willing to go right along with them down the fast-money rabbit hole (Framsóknarflokkurinn, Miðflokkurinn, etc).

BTW, trivia: while "Smári" most commonly means "clover", it can also mean "transistor" - which I find ever-so-fitting for a Pirate MP. ;)

Re:Crypto-currency mining is fly-by-night

[drinkypoo]

While there is some massive centralised hydro and thermal power generation in Iceland (they smelt bauxite to aluminium, which uses a lot of power), data centres - even for mining - in Iceland are nothing new;

Cryptocurrency uses a lot more power than a normal DC, though. Computation is what consumes power. My PC idles at about 100W but it will peak out at about 350W when GPU and GPU are busy. Your average server's CPU is near idle most of the time and it doesn't even have a GPU.

The only place it makes sense on a species level to be mining cryptocurrency is where we're already using resistive electrical heating. There's really no drawback to that plan. Different parts of the world have winter at different times, so if you did your mining wherever it was cold at the time, that might make sense. Unfortunately, it costs too much more to make a mining rig than a space heater for that to be practical, so we're just burning up the planet for nothing. What a ghastly waste of resources. We're hastening our demise so that a handful of people can get rich, as usual.

Re:Crypto-currency mining is fly-by-night

[Hognoxious]

There were plans to connect the icelandic grid to the EU via Scottland ... however with the BREXIT going on tjose are on hold.

Yeah, I'm sure that was the only reason. Odd though, I didn't realise the conductance of wires was affected by political boundaries.

They likely get reactivated after the Scotland went independent and rejoins the EU.

Given the demographics it's much more likely that the UK will rejoin before that happens. If, indeed, they ever manage to actually leave in the first place.

Re:Crypto-currency mining is fly-by-night

[angel'o'sphere]

Why would power prices go up if icelands decide to store and provide power for the EU?

Interesting that a ccountry that has less than twice the population of the mediocre town I live, can not gang up and gets its shit together like Icelands displayed during the last soccer world championships :)

Re:Crypto-currency mining is fly-by-night

[Anonymous Coward]

Why would power prices go up if icelands decide to store and provide power for the EU?

Greedy bastards would get involved. You know they'd screw their own grandmothers out of house and home if they could.

Re:Crypto-currency mining is fly-by-night

[angel'o'sphere]

The lack of conductivity of wires is grately overrated.

Right now, I'm as well of the opinion that the UK might not leace after all.

But: that will require interesting shifts in many things.

If the UK really exits, it is unlikely they rejoin in the near future. They basically don't fullfill any requirement for joining.

Re:Crypto-currency mining is fly-by-night

[es330td]

They basically don't fullfill any requirement for joining.

They are the fifth biggest economy in the world. That fact, and no other, should be sufficient for any organization of countries to want the UK as a member.

Re:Crypto-currency mining is fly-by-night

[Rei]

Why would power prices go up if icelands decide to store and provide power for the EU?

Power prices are much lower here than in mainland Europe. So they'd rather sell to mainland Europe than here, until prices go up enough here to match mainland Europe.

Re:Crypto-currency mining is fly-by-night

[Rei]

Oh, and to give you an idea of what Icelanders generally think of planning ahead: there's a place near where I live where there's bridge piers in the middle of a fjörd, but no bridge. And no road, either. Where you'd need a road to connect to the hypothetical bridge, there's houses on one side and businesses on the other, blocking any way to access it. They started building the bridge, then just changed their mind and put neighborhoods and businesses instead, and then later built a different bridge further west.

Now, if that were a unique case that would be one thing. But it's not. Maybe 5-10 kilometers further north, they did it again. At least there's no houses blocking that one, but... they started building a bridge, and then just stopped.

But hey... (th)etta reddast...

Re: Crypto-currency mining is fly-by-night

[Anonymous Coward]

The same could be said of you wasting energy reading a website. You probably even promote using SSL, which just adds extra energy consumption. Think about the children you are leading to the literal dark ages!

Re: Crypto-currency mining is fly-by-night

[drinkypoo]

The same could be said of you wasting energy reading a website.

True! However, I'm actually learning something here. Cryptocoins are burning cycles for the sake of it.

You probably even promote using SSL, which just adds extra energy consumption.

I actually think that's dumb for something like /., except in principle. If all the traffic is encrypted, the traffic which needs to be encrypted stands out much less. It's sad that this is a consideration, but it is.

Re: Crypto-currency mining is fly-by-night

[Srin Tuar]

> Cryptocoins are burning cycles for the sake of it.

Nonsense; the fact that you dont understand the value is not the same as the value not existing.

I suspect crypto mining reduces energy use for finance, and does not increase it.

Re: Crypto-currency mining is fly-by-night

[Anonymous Coward]

Please list the value of Bitcoin, otherwise you are just another late adopter trying to make money.

Re:Crypto-currency mining is fly-by-night

[angel'o'sphere]

If you produce more power than the island needs, why would that affect the price on the island, sorry, I don't get it.

Re:Crypto-currency mining is fly-by-night

[angel'o'sphere]

Depending on what the economy can contribute, or not?
If the don't want foreign workers in their country then there is no deal.
If they have nothing to sell of interest, then there is no deal anyway.

Schmeptical

[Hognoxious]

Icelanders, who are skeptical of speculative financial ventures after the country's catastrophic 2008 banking crash

Skeptical my arse, they made out like bandits.

It was their customers that lost out.

http://www.thisismoney.co.uk/m...

Re:Schmeptical

[Anonymous Coward]

Icelanders, who are skeptical of speculative financial ventures after the country's catastrophic 2008 banking crash

Skeptical my arse, they made out like bandits.

It was their customers that lost out.

http://www.thisismoney.co.uk/m...

Why should a nation's population pay the price for a few bankers' gambling? Some people lost money, the people responsible for the crash went to prison, and the majority of the people weren't shouldered with a debt they had no say in creating.

Re:Schmeptical

[Rei]

What gets me about all of the Icesave nonsense is all you had to do was click through to the terms - just 1-2 clicks from the front page of the website about Icesave accounts - and it listed the insurers. The #1 insurer was a private fund. The #2 insurer was the British government (in the UK; the Dutch government in the Netherlands). It was explicitly spelled out! And indeed, that's how it should have been according to banking regulations; private funds were perfectly acceptable as the primary insurer, and the country of the citizens purchasing the product is the secondary insurer. Of course, the private Icelandic banking fund went bankrupt in the crash, which passed the liability on to the secondary insurers (aka, the UK and Dutch governments). Who sued Iceland in the EFTA court, to try to get Iceland to take on their liabilities. And - I can't stress emphasis on this enough - lost on all counts.

Should banking regulations have allowed private funds to back accounts? Probably not. But they were what they were.

That's not to say that there weren't Icelanders who contributed to the crash - far from it. The level of criminality going on among top figures in the banking industry to deliberately prop up bad assets and make off like bandits was insane. But people here are as angry with them as people elsewhere, as they crashed our economy. Our currency literally got cut in half. Picture that, in a country where most goods are imported. Picture that, in a country where loans were generally denominated in foreign currencies. The 3 banks that went under had combined liabilities equal to half that of Lehmann Brothers... but in a country 1/1000th the population of the US. It was devastating.

And on top of that, we had the British trying to stick us with their liabilities and treating us as terrorists. You know, the UK - the country that spent decades stealing our fish and depleting our stocks. But hey, if you want your nets back, you can have them. ;)

Re:Schmeptical

[Anonymous Coward]

Our currency literally got cut in half. Picture that

Well, I'm imagining a coin cut in half...

Value Added Tax

[Bruce66423]

This is the properly worked out sales tax that Europe uses to raise a lot of revenue. Every company pays VAT on its inputs, charges it on what it sells, and sends the difference to the government. Bitcoin miners avoid this charge, so it is reasonable for the legislator to make this point.

Re:Value Added Tax

[angel'o'sphere]

Bitcoin miners avoid this charge, so it is reasonable for the legislator to make this point.
They don't.
They pay VAT and other taxes on electric power.
And they pay on the full earnings on the coins income or corportate tax.

They are in no way different than a 'true miner', fisher or farmer. None of them pays VAT on buying raw products, they simply 'get them' and 'sell them' and pay VAT on the sales.

Re:Value Added Tax

[JaredOfEuropa]

It sounds like the issue is that selling BTC isn't properly covered by existing VAT rules.

Re:Value Added Tax

[Rei]

They pay VAT and other taxes on electric power.

Please start with looking up what VAT stands for. Value Added Tax. At each stage where value is added to the product stream, VAT is levied. Are you saying that bitcoins are worth no more than the power? That the company is mining them for giggles?

If a company makes alumium, their alumium sales are taxed as well as them paying corporate taxes. It should be no different with bitcoin mining.

Re: Value Added Tax

[Anonymous Coward]

It's really disgusting seeing vultures circle, waiting for the meal to die, knowing they are about to plunge their heads into the still-warm entrails.

Yes, I mean you.

Re:Value Added Tax

[angel'o'sphere]

Every bussiness where you create value 'from nothing', like fishing and farming, has VAT rates for the sold products that are actully not worth colecting as the oversight about it costs more than the VAT returns.
So you want to say: if you mine gold in Icelands and sell the gold you have to add VAT on the sale, and give it to the tax bureaus? If that is the case, bitcoin should be handled similarily (and the law actually most likely covers that already, so no law change required, or not?)
If it is not the case it should have no extra tax but handle it via income/corporate tax.

Re:Value Added Tax

[Anonymous Coward]

They don't.
They pay VAT and other taxes on electric power.
And they pay on the full earnings on the coins income or corportate tax.

They are in no way different than a 'true miner', fisher or farmer. None of them pays VAT on buying raw products, they simply 'get them' and 'sell them' and pay VAT on the sales.

Actually, those who are paying VAT are people! VAT is just a scam to get money from individuals only because companies or corporations can and will pass on the VAT to individuals.

If you don't get it, here is an example. Let's say VAT is at 10% for easy calculation. Company A and B sell each other products in a month, and each earns 10,000 Euro. Now, company A and B has no VAT because each collects and spends 1,000 Euro on selling & buying products. Each company A and B then sells all their products with 10% profit (11,000 Euro) to people (customers) and collect 1,100 Euro. The 1,100 Euro each company A and B collects will be send to the VAT collector. So who are actually paying VAT? Of course, people pay it. That's why VAT is never good for individuals because it makes products price higher. At the same time, companies/corporations act like they are heavily affected too but they don't.

Re:Value Added Tax

[swillden]

Every bussiness where you create value 'from nothing', like fishing and farming, has VAT rates for the sold products that are actully not worth colecting as the oversight about it costs more than the VAT returns.

Huh? VAT is just a percentage of (sale price - cost of goods). If cost of goods is zero (which is basically never true, but ignore that), then it's just a percentage of sale price. The only way this is "not worth collecting" is if the sale price is nothing, in which case those engaged in the business are going to have a hard time eating.

if you mine gold in Icelands and sell the gold you have to add VAT on the sale, and give it to the tax bureaus? If that is the case, bitcoin should be handled similarily

Sure. Cost of goods would be power, hardware, probably cost of leasing space, etc. (labor is not usually included in "cost of goods" for VAT purposes, as I understand it). Revenue would be the sale value of block fees collected (paid in bitcoins) plus bitcoins mined. One complication is that the bitcoin mining operations might find it easy to transfer excess coins to some low-tax jurisdiction and sell them there. I suspect that existing law can probably handle that, though, interpreting it as smuggling untaxed goods out of the country or some such. The regulators might have to figure out novel ways of monitoring the business.

The bigger worry, I think, is building out new generation capacity to supply the miners, then being left with it when they leave or die.

Re:Value Added Tax

[Bruce66423]

VAT is an attempt to ensure that ALL economic activity in an economy is taxed and makes a contribution. The alternative approach - of charging a purchase tax that is not recoverable at each stage in a product's creation gives a massive advantage to big firms that are vertically integrated over those who have to pay the tax at each stage. Note of course that many firms produce goods that are both sold to final consumers and to other firms; suggesting they don't charge other firms merely encourages the creation of loopholes. The classic demonstration of the problem of this was in the late Roman Empire, where such a purchase tax was introduced, benefiting the wealthy with their integrated large estates, and squeezing the small scale producer.

So yes, VAT is the least worst solution. The ultimate purpose is that the final consumer pays the tax; the VAT mechanism of netting off VAT payments higher up is reduce the distortions in the system. Given that European countries want a purchase tax of 20-25%, they need to reduce the impact of its distortions.

Re:Value Added Tax

[viperidaenz]

They're not like a true miner.

When was the last time someone paid VAT on the bitcoins they mined?
When was the last time someone paid VAT to customs when they bought bitcoins from another country?

People are treating bitcoins like shares or currency. They should be treated as a commodity.

Re:Value Added Tax

[angel'o'sphere]

VAT on agriculture goods in Germany was until recently 1.5%

So: not really worth collecting. Considering that a farmer or fisherman pays VAT on fuel and other goods, and that those payments are deducted from the VAT he has as revenue, it is bottom line still again a zero sum game. Unless the farmer has an relatively high harvest with very low consumption of energy etc. it is always a negative for the state.

One complication is that the bitcoin mining operations might find it easy to transfer excess coins to some low-tax jurisdiction and sell them there
Tax laws usually don't work like that. Usually you are responsible for all your global income at the place you are living. So you could only avoid VAT or similar taxes with such a scheme, which most of the time makes no sense.

But the economy did take a nasty hit

[Bruce66423]

In the short term a lot of people were very uncomfortable. True - they've recovered well and established the new (for them) industry of tourism which is very nice. But the real value of their economy, given the substantial fall in the value of their currency, is still damaged.

How about using it on some Folding@Home clusters

[Anonymous Coward]

Instead of of imaginary money that loses over two thirds its value (19000 to 6000) in a few weeks.

Re:How about using it on some Folding@Home cluster

[Rei]

For a minute I thought you were talking about the Icelandic króna ;)

Re:How about using it on some Folding@Home cluster

[supremebob]

You can't do Folding@Home on a ASIC miner, which is probably what the Bitcoin miners are using. Mining Bitcoin on a CPU or GPU stopped being profitable years ago.

Without cryptocurrency, those ASIC's are just overpriced electric space heaters.

Cancer Genetics Crypto Coin

[Drethon]

Need a crypto coin that is unlocked by doing processing for cancer genetic research. Probably no way to make it work but it would be nice if all this crypto coin mining processing went to something worthwhile.

Re:Cancer Genetics Crypto Coin

[Baron_Yam]

> Probably no way to make it work

Well, IIRC there used to be some '@Home' calculation projects where they'd let the clients determine whether they'd been successful or not initially, but nothing mattered until it was confirmed by the central authority.

So... if you have a crypto that was able to do something similar to the already present distributed transaction confirmation requirements, it should be possible.

Then again, that's a guess based on superficial similarities between the tasks, not an answer based on a comprehensive understanding of the underlying protocols.

Re:Cancer Genetics Crypto Coin

[lucasnate1]

https://foldingcoin.net/

Re:Cancer Genetics Crypto Coin

[James Carnley]

Modern coins are no longer using Proof of Work but instead using Proof of Stake. So really it's just the Bitcoin dinosaur that's wasting all of this electricity. The crypto currencies that will matter the most in the future (Ethereum (Soon), NEO, NANO, etc) are proof of stake and require very little power to run. Some can even be run on mobile phones.

Re:Cancer Genetics Crypto Coin

[Anonymous Coward]

Actually, not yet. Very few true PoS systems are deployed and working on meaningful blockchains. Don't let NEO confuse you.

Ethereum has a PoS plan, but they have yet to implement it. For now, PoW continues.

But how are they using the waste heat?

[Anonymous Coward]

Just think, if every Icelander family puts a cluster of ASICs in their heating systems, they'd stay warm AND do something useful with their lives.

Re:But how are they using the waste heat?

[Luckyo]

Incredibly inefficient. Electric heating is much more efficient when done with proper heating systems.

This would be like using rocket engines instead of ICEs in cars to drive around.

Re:But how are they using the waste heat?

[Anonymous Coward]

Incredibly inefficient. Electric heating is much more efficient when done with proper heating systems.

You're forgetting something. Think about it for a second.

This would be like using rocket engines instead of ICEs in cars to drive around.

If you're launching a rocket anyway, why not use the spent rocket booster for a space station?

See, we're talking about waste heat already. It exists, so why not put it to use?

Re:But how are they using the waste heat?

[Luckyo]

Because you want to have more than a few cars on the streets.

Humans...

[Anonymous Coward]

We're basically pissing away free/renewable energy in ever increasing quantities in order to change a digit in an encrypted wallet -.-'

Couldn't we come up with a less energy-intensive way of distributing a variable of group-subjective value, and then use the energy for something real like desalinating sea-water or powering some kind of CO2-scrubbing solution?

The instinct that keeps those miners going is the instinct that spells doom for humanity. It's short-sighted, driven by greed masquerading as some kind of economical altruism/savior of money, and ultimately superfluous.

Cheap electricity to smelt aluminum

[darthsilun]

Is also cheap electricity to mine bitcoin.

Those nabobs whining about squandering renewables need to learn about Iceland's renewables. It's all hydro and geothermal. Use it, don't use it. The rivers still run, the ground is still hot.

People are going to mine bitcoin. Frankly I can't think of a better place to do it.

Re:Cheap electricity to smelt aluminum

[Rei]

Mostly hydro. And if you don't use it, you don't dam up our beautiful river canyons.

Re:Cheap electricity to smelt aluminum

[Anonymous Coward]

Enjoy it while you can. Iceland just moved up a notch on the suck level.

Re:Cheap electricity to smelt aluminum

[Rei]

Thanks for letting me know - I'll welcome him whenever I see the chance.

There's one group that I'm quite glad we seemingly don't have as many of as other countries, and that's racists.

Derp

[Anonymous Coward]

This is snapshot, where we are too old to understand the enormous necessity for Bitcoin.

Call it a "pool fee" and nobody will blink

[Anonymous Coward]

Iceland just needs to run its own pool and require miners to use it... they can take their 1% pool fee and call it done.

Re:Value?

[jellomizer]

Once bit-coins were taken seriously they become a center of greed.
Capitalism itself isn't bad, but what is happening is the focus on acquiring wealth has exceeded the wish to produce anything.

Re: Value?

[peragrin]

Millennials are 1000 times better than live beyond yo u reans baby boomers who have racked up 22 trillion in debt and are going to make their grandkids pay it off for them.

Right now to reach break even government spending we need 10% annual growth in tax revune. Instead we get tax cuts and vague promises. By 2040 the us government will be completely bankrupt at the current rate of spending vs income. As it sits now 25% of our federal budget goes to pay interest payments on debt. Not prinicipal just interest. That debt is primiarily owed to the be people of the USA.

Put that on perspective. That means if you earn $300k annually your interest payments are $88k and your principals is in millions.

There is no way out of this and that is 100% due to the lazy fucking stupid boomers

Waste your limited resources!

[Anonymous Coward]

Go on!
Love,
China

Re:Waste your limited resources!

[Anonymous Coward]

They're renewables.

Cryptocurrencies are really currency?

[Anonymous Coward]

If so-called cryptocurrencies are really currency, why no company/store can use Bitcoin as currency anymore?
Because the price of Bitcoin proved to be extremely unstable to use as a currency?
Would the result be different, if Bitcoin replaced by any other "cryptocurrency"?
Aren't all work the same way?

Or, they are not actually virtual currency but virtual investment?
But, if they are actually investment, why we need/want them?
What would happen to world economy, if people invested in virtual investments, instead of real investments?

Or, all so-called cryptocurrencies are actually just a modified (made decentralized and paying variable interest) Ponzi Schemes?
(Price of cryptocurrencies would keep increasing in the long term (by their design), so it is equivalent of paying variable interest to all long term investors.)

As more and more people invest in cryptocurrencies, it will become harder and harder to ban their trading everywhere!
All cryptocurrencies need to be banned globally before it is too late!

Re: Value?

[Anonymous Coward]

Have some avocado toast and chill out.

Re: Value?

[kelemvor4]

Millennials are 1000 times better than live beyond yo

They live beyond yo? Yo is a very distant location indeed. I heard that it is hear ho ho and a bottle of rum.

u reans baby boomers who have racked up 22 trillion in debt and are going to make their grandkids pay it off for them.

Right now to reach break even government spending we need 10% annual growth in tax revune. Instead we get tax cuts and vague promises. By 2040 the us government will be completely bankrupt at the current rate of spending vs income. As it sits now 25% of our federal budget goes to pay interest payments on debt. Not prinicipal just interest. That debt is primiarily owed to the be people of the USA.

Put that on perspective. That means if you earn $300k annually your interest payments are $88k and your principals is in millions.

There is no way out of this and that is 100% due to the lazy fucking stupid boomers

Meanwhile, back on earth you will find that in the US the current debt situation is squarely on the shoulders of the Obama administration. I guess from one perspective you're right. I believe Obama is a "baby boomer." The current administration is working on it but seems to meet with objections at every turn. Fortunately, they've already made some progress and still have 3 (maybe 7) more years to work on it.

No need to go Iceland to get APKoins

[Anonymous Coward]

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Re: Value?

[Anonymous Coward]

Squarely on Obama?

In 1998 as Clinton was getting grilled about having an affair, Republicans pushed through a 10 year plan to be make social security solvent by 2008. This was know to happen in 1998.

Guess what in 2002 bush started giving tax cuts and gutted social security. $10 trillion in wars didn't help.

And guess what in 2010 social security and Medicare adding trillions annually to the debt.

All because baby boomers can't follow long term plans, and can't balance a budget.

Re: Value?

[Anonymous Coward]

You skipped the point that social security is a trust fund that has been raided by both parties to fund things they were unwilling to appropriate financing in the correct way for, forever.

Thay would basically put an IOU in the fund and promise to deal with it later. Guess what?! It's later. We all created this mess. Not one side or the other and the sooner we all realize that, the better off we will be.

Re: Value?

[mspohr]

Millennials are 1000 times better than live beyond yo u reans baby boomers who have racked up 22 trillion in debt and are going to make their grandkids pay it off for them.

Right now to reach break even government spending we need 10% annual growth in tax revune. Instead we get tax cuts and vague promises. By 2040 the us government will be completely bankrupt at the current rate of spending vs income. As it sits now 25% of our federal budget goes to pay interest payments on debt. Not prinicipal just interest. That debt is primiarily owed to the be people of the USA.

Put that on perspective. That means if you earn $300k annually your interest payments are $88k and your principals is in millions.

There is no way out of this and that is 100% due to the lazy fucking stupid boomers

I'm trying to parse your post:
You seem to have a call to generation warfare in your first mangled sentence. I don't know if any generation has a monopoly on debt but lack of free university education has certainly caused debt to rise to unsustainable levels. I don't think we can blame it on a particular generation but we can blame the current old white male Republican party.

Regarding taxes. Yes, you are right. However, the cause is Republicans giving tax breaks to their corporate sponsors (bribes). We have a corporate kleptocracy and high (and increasing) income inequality which will give the Republicans an excuse to make further cuts to programs such as education and health.
As long as we allow corporations and rich people to run the government through their bribes, we are screwed.

Re: Value?

[Anonymous Coward]

You'd probably appear less disingenuously sanctimonious if you weren't replying to a post replying to a post denouncing Obama's administration while praising the current one.

But since you were, well...what did you REALLY accomplish?

Re: Value?

[Anonymous Coward]

Lol you fucktard, this is squarely a republican problem, thank meddling in Iraq for this bullshit.

Re: Value?

[Anonymous Coward]

Incorrect, and congratulations for yet again drinking the GOP kool-aid.

Dummest thing I've heard

[Anonymous Coward]

There's two really stupid ideas that are being passed around here as truth.
1. If mining Bitcoin were 100% efficient, there would be no heat generated but this isn't the case, but the heat being generated can be easily also be used to heat at house. Saying that more power goes in to mining than to into heating is flat out wrong, almost all the power is going into heat, a very small percentage is going into calculating.
2. Electric heating is somehow inefficient, more so than if it isn't a proper electric heater. This is flat out wrong as well. If you have a 100W light bulb, only a few percent is "waisted" as light, the rest is generated as heat. 1000W of heat from light bulbs is exactly the same as 1000W heat from bitcoin mining GPUs is exactly the same as 1000W heat from ASICs is exactly the same as 1000W some ceramic space heater. Heating being inefficient, where do you think the "wasted" energy is going? If you say heat, than I've got a space heater smarter than you are. Using crypto calculations to heat your house is only slightly less efficient than the best electric heater that exists, the "wasted" power you lose is going into the calculations.

Re:Dummest thing I've heard

[Anonymous Coward]

Resistive heating is stupid. Why would you ever do that when they have these magical things called "heat pumps" that move much more energy than they consume to operate? Put 1000W into a heat pump and you'll move MUCH more energy from outside to inside (or vice versa) than 1000W.

All computational heating is resistive. The energy used to power a 1MW bitcoin mine could provide 3MW of heating energy for the same consumption.

Re: Value?

[dj245]

Millennials are 1000 times better than live beyond yo u reans baby boomers who have racked up 22 trillion in debt and are going to make their grandkids pay it off for them.

Right now to reach break even government spending we need 10% annual growth in tax revune. Instead we get tax cuts and vague promises. By 2040 the us government will be completely bankrupt at the current rate of spending vs income. As it sits now 25% of our federal budget goes to pay interest payments on debt. Not prinicipal just interest. That debt is primiarily owed to the be people of the USA.

Put that on perspective. That means if you earn $300k annually your interest payments are $88k and your principals is in millions.

There is no way out of this and that is 100% due to the lazy fucking stupid boomers

Sooner or later, most forms of government fall into this trap. Politicians or the powers-that-be want to stay in power, and delivering benefits to constituents (lobbyists and individuals) while not raising taxes is a surefire way to keep getting elected. Just look at for how long the gas tax has not been raised (25 years). The only potential problem is to not be the guy in charge when the debt becomes unsustainable. And even then, the worst that will likely happen to the politician is they will have to retire from politics and be a consultant for the companies that they did favors for.

It is difficult for a politician to take actions that have short term pain but long term gain. It is hard or impossible to get elected under such a platform - the attack ads become insurmountable. So the platforms become extremely vague and it is impossible to tell what a politician will do if elected. In these situations, there is little the voters can do to solve the problem. It generally takes a banking crisis or high interest rates to trigger meaningful reform.

Re:Value?

[Anonymous Coward]

Bitcoin mining does not use gamer video cards. Or GPUs at all. To mine Bitcoin, you must use custom-built ASICs that are good for nothing but mining Bitcoin.

Video cards are being used to mine other tokens, like Ethereum.

Re: Value?

[DNS-and-BIND]

That's no way to thank Obama who doubled the debt during his 8 years and spent the money on foreign wars. The world is a better, more stable place today because of his actions and his spending. Ungrateful jerk.

Re: Value?

[youngone]

As long as we allow corporations and rich people to run the government through their bribes, we are screwed.

What choice do you have? I don't think the average American is allowing this to happen. Your system of government is set up to work this way.

Re: Value?

[Anonymous Coward]

The truth hurts doesn't it ?

Re: Value?

[Anonymous Coward]

Don't you mean bush? I'm confused.

Re: Value?

[Anonymous Coward]

Destroy gaming? Wtf are you talking about?

Gaming isnâ(TM)t a measure of anything, itâ(TM)s one of a million things you can do to entertain yourself, itâ(TM)s certainly not something that contributes any more to society than crypto mining. âoeGamerâ culture is bullshit. Get a job and get a life.

Damn millennials. The douchebag generation.

Perhaps you could afford to buy and use a REAL PHONE that don't strange JUNK CHARACTERS to your postings making you look totally lame.

Re: Value?

[Deliveranc3]

You mean the wars Bush started?

Why do the Dems get blamed for cleaning up the Repubs mess?

If you realize it takes times for policy's to actually have effects you realize the Republicans are the worst thing to happen to the U.S.

Re: Value?

[DNS-and-BIND]

So Obama didn't start wars in Libya and Syria and crush Egypt's government. OK man. Those dirty republicans, is there anything they can't do?