Bitcoin Mining Is Becoming A Professional, Industrial, Nordic Enterprise

Strokkur geyser in IcelandABG/Getty Images

Few people actually own their own private planes outright.

Instead, they buy into companies that sell shares in them, dividing up the cost of maintaining what would otherwise be a ludicrously expensive enterprise.

As the New York Times' Nathaniel Popper points out today, this is professional cost-sharing arrangement now how many profit-seeking Bitcoin fanatics have begun approaching mining the digital currency.

Bitcoins are mined by computers unscrambling encrypted bits of numbers. As more Bitcoin are mined, increasingly greater amounts of computing power, and thus electricity, are required. As we've discussed, the fastest miners on the market now sell for thousands of dollars, on top of whatever electricity costs you have to pay to keep what amounts to a supercomputer running 24/7.

So how do you keep those costs in check?

Pool your resources and move to Iceland, of course.

Thanks to vast geothermal and and hydropower reserves industrial electricity costs $0.02-$0.03 per kilowatt hour, compared with $0.07 in the U.S.

Among those leading the push to professional, industrial-scale Nordic mining, the Times' Popper writes, is Emmanuel Abiodun, 31. This October, the former HSBC analyst from London moved the operations of his professional mining pool business, called Cloud Hashing, to Reykjavik. His 100 machines can now crank out 225 Bitcoins a week.

The cost to join the pool and own a tiny fraction of that haul? $999. But 4,500 people have signed up, and Abiodun says he's about to open another site in Texas, where it will be more expensive to mine but put him in greater proximity to the mining machines' creators, Austin-based Cointerra.

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