Northern European countries are famous for their "sustainable mining", where the cost of producing electricity is very low and therefore the price is low, mainly from renewable sources.

 But other industries also want to benefit from this green energy. 

This number is half of what is consumed by all data centers - for the Internet, cloud computing, the entire financial sector and all other cryptocurrencies. 

For comparison, and to make the picture clear, it suffices to know that the total annual energy consumption in Germany is just over 500 TWh.

This is why bitcoin — and the entire blockchain technology upon which it is based — is suspected of harming the climate, especially since about 80% of the so-called hash rate — a unit of measurement for the computing power needed to mine and process bitcoins — is sourced from Asian countries. 

None of these countries generates more than a quarter of its electricity needs from renewable sources.

 In addition, another 15% of computing power comes from Russia and the United States, which are not leaders in green energy. 

Sustainable mining in the far north?

This is why “bitcoin mining” in Scandinavia is an environmentally friendly way out of this dilemma.

 Iceland was one of the pioneers in this field. 

According to the Icelandic Blockchain Foundation, 8% of all bitcoins are mined there. Using geothermal and hydropower, state-owned Landsvirkjun and other energy companies generate nearly 100% of Iceland's electricity.

Electricity produced by these sustainable means is so cheap that there has been talk of an undersea cable to the UK for years to deliver green energy to Europe, where electricity is very expensive.

 Instead, the decision was made to attract energy-intensive industries to the island, including aluminum smelting furnaces and the blockchain industry.

One of the first companies to build a bitcoin mine in Iceland was Genesis Mining in 2013. Among its founders was Philip Salter, now CTO of its subsidiary Genesis Digital Assets, who summed up Iceland’s advantages in one line: “There are no political risks or Geopolitical... The infrastructure is very reliable and the electricity is sustainable and incredibly cheap," he told DW.

Do Scandinavian countries face the same fate? 

There is so much renewable energy available in Scandinavia that some countries barely know what to do with all of it. "The Nordic region has a projected energy surplus of approximately 30 TWh per year under average weather conditions," Olaf Johan Botnen, an energy analyst and economist for Norway's Folio Insight, tells DW.

However, the demand for electricity from heavy industry is growing there as well, especially for the production of "green steel", where iron is processed into steel using renewable electricity and green hydrogen instead of coal.

 Hydrogen - which is also sustainable and needed for the production process - is produced from water using renewable electricity.

In northern Sweden, there are two industrial associations with big plans in that region. One is in the small town of Boden, which is also home to the Genesis Bitcoin mine, and the other is in the nearby port city of Lulea, where two mega plants will be built by the end of the decade.

About 15 terawatt-hours of electricity will be generated annually by hydroelectric plants and 10 terawatt-hours by the largest onshore wind farm in Europe soon, but it is not expected that this amount of energy will be enough to meet the growing demand.

Could Bitcoin lead to renewables?

But Philip Salter is confident that Sweden will remain an attractive location for bitcoin miners. However, it is questionable to what extent the Scandinavian countries are going to make Bitcoin and other cryptocurrencies any environmentally friendly. 

The blockchain industry in all five Scandinavian countries combined represents about 1% of the global hash rate, according to figures from the University of Cambridge.

Mining expert Salter looks at the problem from another angle: "I think our industry is already driving the expansion of renewables. Not only in Scandinavia, but especially in developing countries." According to what he told DW.

This is supported by the fact that wind and solar power plants are the cheapest sources of electricity that can be installed today.

 But the truth is that bitcoin mining increases the demand for electricity. 

Until more renewable electricity is generated, Bitcoin and other cryptocurrencies will be powered by fossil fuel energy.

Tesla stops accepting bitcoin payments

It seems that these environmental concerns were understood by Elon Musk, the founder of the American electric car company (Tesla), as he recently announced that the company stopped accepting payments using the “Bitcoin” cryptocurrency for environmental reasons. 

Musk said in a tweet on Twitter that the company is concerned about the increased use

 quickly to fossil fuels for bitcoin mining and transactions, especially coal.

 Musk wrote: “Cryptocurrency is a good idea on many levels and we believe it has a promising future, but it cannot come at a huge cost to us.”

 environment.” Tesla began accepting bitcoin to buy its electric cars last March. 

The company had earlier announced the purchase of $1.5 billion worth of bitcoin, giving the oldest and most popular cryptocurrency a huge boost.