Words by

Iryna Zubenko

Photo by

Natasha S.

Loki Lindarson on why you may want to stay away from the crypto frenzy

Cryptocurrency has been around for more than a decade, yet for most people it’s nothing but a trendy buzzword. While everybody understands that it’s a form of digital money, only a very small percentage have actually ventured into digging deeper or investing, trading and cashing out in the crypto world.

A few years ago, Iceland made headlines as a go-to crypto-mining destination due to its favourable conditions for energy-intensive operations, but things are not so black and white, according to Loki Lindarson. With a background in tech, Loki has been monitoring crypto operations in Iceland for many years. His diverse background also includes founding the Icelandic Pirate Party and launching the country’s first Bitcoin ATM.

GV: Is Iceland a crypto haven?

There was some mining at some point. Yet, truthfully, everybody that I talked to about mining now said it’s so difficult to operate in Iceland, they just went to Norway or Sweden. They were here only because of cooling costs. You can get that in Sweden and Norway, and that’s what they want. Some miners still operate here. They don’t get taxed by the government at all, as far as I know. They keep their heads down and everybody pretends they don’t exist.

I brought the Bitcoin ATM to Iceland in 2018 and it ran for about a year. It was very popular – I had days when people would put millions of krónur into it. Unfortunately, at the same time, Iceland got on the Financial Action Task Force (FATF) grey list – it was accused of being a good place to launder money. All the banks freaked out and I had to take the ATM down immediately. But at the same time, there are people trading crypto on Facebook. There’s just no way to regulate that. 

GV: Do people know enough about crypto? What should one know at this point?

Financial literacy in Iceland is very low. But it’s better now, after the crash. 

Crypto is a very interesting experiment that hasn’t completely imploded yet. There have been a lot of messes because it’s mostly still super experimental and unregulated. Nobody should ever treat it as anything except gambling or speculation. You should never ever speculate more than you can afford to lose, which is just common sense. For example, if you have $100 and need $50 to live, take ten and play, don’t take all of it. Apparently, this is not common sense for a lot of people.

I think crypto can do some interesting things. But it’s going to take a long time. It has to figure out what it is and where it goes. There are some things it’s very useful for and some things that people try to use it for. It has to find its niche – like a lot of tools in the information age, it’s just data; it’s not a hammer to figure out where it fits.

GV: Is crypto not as safe as everybody thinks?

No. When you work with computers, you find it’s Swiss cheese all the way down. You have a zero-day out, it’s something in computer code when you have an exploit, and all of a sudden, for example, Windows 11 can be exploited remotely. Out there in the world running, it can be exploited right now. This happens all day long, every day. 

There have been bugs in Bitcoin. There have been bugs in Ethereum. There have been bugs in many smaller shitcoins that have wiped them out overnight. If someone came up to me and asked, “How do I make money panning for gold?” I’d say, “Yeah, you can pan for gold, find gold, and make money doing it.” But you have to do it right, be in the right spot, know what you’re doing and get lucky. It’s not something that most people know how to do or should do because there are too many ways to do it wrong. It doesn’t mean I’m anti-crypto, but I’m sceptical of people getting rich quickly from crypto.