2013-12-21 New York Times - Into the Bitcoin Mines (in Iceland)

[cr1776]

http://dealbook.nytimes.com/2013/12/21/into-the-bitcoin-mines/

On the flat lava plain of Reykjanesbaer, Iceland, near the Arctic Circle, you can find the mines of Bitcoin.

To get there, you pass through a fortified gate and enter a featureless yellow building. After checking in with a guard behind bulletproof glass, you face four more security checkpoints, including a so-called man trap that allows passage only after the door behind you has shut. This brings you to the center of the operation, a fluorescent-lit room with more than 100 whirring silver computers, each in a locked cabinet and each cooled by blasts of Arctic air shot up from vents in the floor.

...

At the end of each day, the spoils are divided up and sent to Cloud Hashing’s customers. Last Wednesday, for example, the entire operation unlocked 225 Bitcoins, valued at around $160,000 at recent prices. Cloud Hashing keeps about 20 percent of the capacity for its own mining.

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[protokol]

Yeah just came across this article myself; I thought it was cool that because they are using cheap renewable energy, they have very low overheads and therefore can invest in equipment on a massive scale and still make profit (probably).

I do find the "15% by February" comment a bit scary though, that is like way more than 1.21 jiggawatts...

[kjlimo]

I wonder how many data centers have the security mentioned here.  Hah!

[bryant.coleman]

I don't know much about the legality of Bitcoin in Iceland, but I hope that the government agents will not shut it down.

[kjlimo]

I don't know much about the legality of Bitcoin in Iceland, but I hope that the government agents will not shut it down.

I take it you're an investor? 

Why would the govt shut it down?  For "producing currency?"

[mog]

Small update from the central bank on bitcoins here in Iceland.
http://www.mbl.is/vidskipti/frettir/2013/12/19/hoftin_stodva_vidskipti_med_bitcoin/

[kjlimo]

Small update from the central bank on bitcoins here in Iceland.
http://www.mbl.is/vidskipti/frettir/2013/12/19/hoftin_stodva_vidskipti_med_bitcoin/

This isn't in English, so I'll have to wait until I'm on a computer to use Google translate.

If anyone cares to share some bullets, that'd be helpful.

[TraderTimm]

Google Translate:

Controls suspend trading in Bitcoin

Business with Bitcoin currency are not permitted under local law on foreign exchange. AFP

It is not permitted to engage in foreign exchange of electronic currency Bitcoin under Icelandic law on foreign exchange. The written response from the minister of Morgunblaðsins stated that the Exchange Act is provided for general restrictions on foreign exchange and capital movements. "It does not seem that the provisions of the Act which exempt goods and services from the foregoing limitations may not apply to transactions with Bitcoin or other exemptions from the restrictions of the Act apply to such a transaction," the response rate.

The electronic coin Bitcoin has been much in the news in recent weeks due to a sharp rise in the exchange rate. When the peak of last month, the exchange Bitcoin sections of 1,200 U.S. dollars. Since then it has been depreciated and Bitcoin now costs around 875 dollars.

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So, looks like another government is fearful of capital controls being routed around. Hardly surprising, sucks for the Icelanders though.

[bryant.coleman]

Small update from the central bank on bitcoins here in Iceland.
http://www.mbl.is/vidskipti/frettir/2013/12/19/hoftin_stodva_vidskipti_med_bitcoin/

So what does this means for the Bitcoin mining business there? Any immediate threats which can affect its operation? Why can't the government in this island nation study something from Germany or Switzerland on how to deal with the BTCs?

[davidjr]

So what does this means for the Bitcoin mining business there? Any immediate threats which can affect its operation?

Server hosting by data centers is not effected by currency exchange restrictions. The government has placed restrictions on foreign exchanges in Iceland, not data processing nor money printing.