Take a tour of Blue Lagoon in Iceland part of the World s Greatest Attractions travel video series by GeoBeats. In the midst of one of the world's coldest countries is a steamy oasis. The Blue Lagoon in Iceland is a wonderful and popular man-made bathing spot. The water here is full of minerals which are said to be healing to skin diseases. The water comes from a nearby geothermal plant where it is heated by the underground lava.