Cryptocurrency: getting hit and popping up again

The development of cryptocurrency is beginning to resemble the arcade game called Whack-A-Mole. For those not familiar, it involves a machine consisting of cabinet with five holes in its top and a mallet. Each hole contains a single plastic mole and the machinery necessary to move it up and down. During play, the moles will begin to pop up from their holes at random. Each time one is successfully hit (or “whacked”), another one appears from another hole. The game’s name has become English shorthand for describing a difficult problem to solve due to numerous issues appearing when one issue is thought to be resolved. Why make this comparison? Let’s start with the whack.

The Chinese government has recently come down hard on cryptocurrency operations, endeavoring to block all trading and mining operations within its borders, the South China Morning Post reports. Technode, meanwhile, reports there is some confusion as to what a crackdown means, whether that’s shutting down cryptocurrency exchanges or simply introducing stricter regulatory measures. Confusion aside, the message is that the jig is up – the government is coming for you in the name of eliminating the risk of fraud. This is not an invalid concern, as the values of cryptocurrencies are based on speculative price increases, which opens up the way to fraud.

However, the Chinese government, like all governments, doesn’t like what they can’t control. To “mine” a bitcoin is not a physical operation, but an electronic one. Warehouses full of computers exist, through which “miners” solve complex mathematical equations to mine (or create) an amount of the digital currency. Lots of these currencies exist, Bitcoin being chief among them, but there is also Ethereum and Dogecoin, among many others (and there will be more – former NBA star Dennis Rodman even started his own cryptocurrency!). Mining operations require lots of resources in the form of electric energy (preferably hydroelectric) and the ability to cool the computers so they don’t overheat.

If China cracks down, where can cryptocurrency mining operations relocate that would have all of their necessities? The answer, for the moment, seems to be Iceland. The mole pops up yet again. Iceland is a strange, beautiful, and powerful country in the north Atlantic that, while not as icy as their name suggests, is considerably cool year-round and this helps keep mining computers cool without excessive air conditioning. It is powerful in the sheer amount of extreme nature that exists there: volcanoes, glaciers, and rivers combine to provide a furious source of hydroelectric energy to keep operations going. YouTube channel Beme News recently filmed a report from one such Icelandic site, and the ingenuity and perseverance of cryptocurrency operators is something to marvel at.