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

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

[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. ;)

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

[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: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.

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: 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