The country's Pirate Party hopes to make major gains in Saturday's elections, with polls suggesting it could take enough seats in parliament to lead the next government.
For many people talk of pirates conjures up images of aggressive men with eyepatches and wooden-legs, but on Saturday the people of Iceland decided whether to elect pirates of a different kind to the country's parliament.
These pirates – led by a female poet and internet activist, Birgitta Jonsdottir, rather than a bearded raider – are not as interested in violence as their 18th century counterparts in the Carribean, but seem to be only slightly less controversial.
Today is the big day, everybody.— Pratar - XP (@PiratePartyIS) October 29, 2016
Members of Iceland's Pirate Party favour radical policy proposals including total drug decriminalisation, making bitcoin legal tender, and renationalising Iceland's natural resources.
The party was established only four years ago and its origins lie in a relatively niche online movement advocating transparency, direct democracy, and reducing copyright restrictions.
But it has been doing well in the polls, leading analysts to suggest it may even win enough seats to take the lead in forming a coalition government alongside other left-wing parties – something the Pirates have already agreed to in principle.
"We think that these parties can cooperate very well... I think it will be a very feasible governmental choice," Katrin Jakobsdottir, leader of the Left-Green movement, told AFP.
The Pirates' sudden rise appears to be mainly due to the fallout from the leak of the Panama Papers in April, which revealed information about a web of offshore accounts – many held by prominent officials and politicians from all over the world.
Iceland's prime minister and leader of the centre-right Progressive Party, David Gunnlaugsson, resigned after being named in the scandal. Support for the Pirate Party rose to 43 percent in the same month as the leaks came out, although it has since declined to around 20 percent – second place behind the centre-right Independence Party.
The revelations further fuelled anti-establishment sentiment while Icelanders are still angry about the 2008 banking crisis, which decimated their country's economy. The crisis is widely perceived to have been worsened by links between bank owners and politicians.
Independence Party Member of Parliament Birgir Armannsson was quoted by AFP as saying, "We're losing support (because of the) big anti-establishment (feeling)."
Voting began at 9:00am (0900 GMT) in Iceland's capital Reykjavik and one hour later in the countryside. Polling stations closed at 10:00pm (2200 GMT).
"Change is beautiful, there is nothing to worry about... We can sense that the times are a-changing," Reuters quoted Jonsdottir as saying after she cast her vote.
Results from the election should be in shortly, but may be delayed due to bad weather.
Depending on the outcome, Iceland may become one of the largest islands to ever be run by pirates, of either the old or new variety.