The Nordic countries are considered the best destinations for bitcoin mining because electricity is cheap there and mostly comes from renewable sources. Other industries are also looking to take advantage of this green energy.

Iceland is one of the meccas for Bitcoin miners. According to the Icelandic Blockchain Foundation, at its peak 8% of the world's bitcoins were mined in the country. Using geothermal and hydropower, the state-run power company Landsvirkjun and other energy companies provide almost all of the country's electricity.
Iceland's electricity is so cheap that it has been discussing laying a submarine cable to the UK for years to deliver green electricity to European countries and solve the problem of expensive electricity. Energy-intensive industries such as aluminum smelting and blockchain are now being drawn to Iceland.

Bitcoin mining company Genesis Mining has been operating in Iceland since 2013. One of its founders, Philip Salter, the company's chief technology officer, sums up the island nation's strengths:"There is no domestic political or geopolitical risk, the infrastructure is very reliable, and electricity is sustainably produced and incredibly cheap."

Iceland's electricity cost advantage is running out
However, Iceland's power generation capacity is reaching its limits."Energy production reaches saturation in 2021 and 2022"Landsvirkjun CEO Hordur Arnarson told Bloomberg recently. As a result, Iceland's electricity cost advantage is very small.
In recent years, the digital currency mining industry has developed rapidly in other regions. Today, Icelandic Bitcoin mining accounts for less than 2% of the global total, or even 1%.

Salter said he can understand why Icelanders are reluctant to sacrifice their unique natural resources for more electricity production.
Scandinavia is also a mining hotspot. Norway has surpassed Iceland in computing power. Salter believes that Sweden is also qualified to compete in the bitcoin mining industry. He said:"Especially in northern Sweden, where we also operate a mine with conditions comparable to those in Iceland."

Scandinavia is also rich in green energy
"In Scandinavia, the amount of renewable energy is so abundant that some countries are almost at a loss as to what to do."Olav Johan Botnen, energy analyst at Norwegian market research firm Volume Insight, told the media,"Under normal weather conditions, the Nordic region is expected to have an electricity oversupply of almost 30 TWh next year."

Electricity demand is also growing in heavy industries in the region, especially for production"green steel". Here, iron is processed into steel, using not coke but renewable electricity and green hydrogen. Sustainable hydrogen is also produced by electrolysis of water using renewable electricity.
Both businesses have big ambitions in northern Sweden. In the small town of Boden, where the bitcoin mining company Genesis is based, and in the nearby port city of Lulea, two huge mines will be built within a decade.

Drive down European electricity prices via submarine cables?
The Nordic countries want to further expand their renewable electricity production, Portnow said. But, as before, only northern Sweden and Finland are easily achievable. In the more populous south of Norway and Denmark, land is scarce and therefore more expensive.

In addition, electricity markets in Northern and Central Europe are also consolidating. A number of undersea cables already connect Scandinavia to the Netherlands, Poland and Great Britain. NordLink cables are now connected to Norway and Germany, with even more planned. For Scandinavians, that means higher electricity prices, Portnow said.
The energy analyst expects electricity prices to rise by around 50 percent within a decade, to 40-50 euros per kilowatt-hour on the spot market.

Can Bitcoin Advance Renewable Energy?

Salter believes that Sweden will remain attractive to the bitcoin mining industry. Still, the extent to which the Nordic countries can make bitcoin and other cryptocurrencies greener is less optimistic. Together, the five countries’ blockchain industries account for about 1 percent of global computing power, according to Cambridge University.

Salter looked at the problem from another angle."I think our industry is actually driving the growth of renewable energy. Not only in Scandinavia, but especially in developing countries."
Supporting this view is the fact that wind and solar plants are currently the cheapest electricity that can be built, and developing countries have the best locations for this. In reality, however, Bitcoin mining increases electricity demand. And until more renewable electricity is produced, the industry will consume more fossil fuels.