Iceland Wants To Try Out Bitcoin Mining Tax Due To High Energy Consumption

Iceland might be the latest country to consider regulations related to cryptocurrency mining although its approach is quite different. Recent reports have revealed that the country’s authorities are considering the implementation of taxes on Bitcoin mining owing to its energy-intensive nature.

The idea of taxes for Bitcoin miners was suggested by Smari McCarthy who is one of the lawmakers in Iceland. McCarthy was speaking during an interview pertaining the country’s current position as one of the most attractive places for bitcoin miners. Iceland is one of the most attractive places for cryptocurrency miners especially because it has abundant energy resources including geothermal power and Arctic air. The latter is particularly ideal especially in cooling the mining hardware without incurring any extra costs that would be required for cooling.

During the interview, McCarthy had this to say: "Under normal circumstances, companies that are creating value in Iceland pay a certain amount of tax to the government. These companies are not doing that, and we might want to ask ourselves whether they should."

The suggestion brought forward by McCarthy highlights one of the biggest problems that has plagued bitcoin mining. The process of mining it consumes a lot of energy and involves expensive GPUs. It is currently too early to tell whether the other lawmakers will find the suggestion appealing. McCarthy is a member of the Icelandic Pirate Party which currently has 6 representatives out of a total of 63 in Iceland’s parliament.

The low party representation in parliament means that it might be difficult for the ideal to be widely accepted. However, it depends on whether the rest of the Members of Parliament will find the idea of taxing miners to be necessary especially as miners continue to demand more power. McCarthy revealed that he recently attended a meeting in which a mining company wanted to acquire 18 megawatts of electricity.

In one of his statements, McCarthy pointed out that the country is spending a lot of power which is being used in cryptocurrency which is not even a tangible product and that it has no real use outside financial speculation. At the same time, companies that create products that add value are required by law to pay a certain amount of tax to the government. The argument is weighty especially from a production point of view and thus it provides a compelling reason for the Parliament to consider taking action.