The Norwegian government has taken action to end subsidies for electricity purchased by Bitcoin mining companies, according to a report y local news source Afterposten on Nov. 21st. Previous to the subsidies’ end, mining firms paid the equivalent of just $0.05 per kilowatt; starting in January, they will have to pay the equivalent of $1.94 per kilowatt–a whopping 3880 percent increase.
“Norway cannot continue to provide huge tax incentives for the dirtiest form of cryptocurrency output,” said Lars Haltbrekken, a member of the country’s Socialist Left Party. “[Bitcoin] requires a lot of energy and generates large greenhouse gas emissions globally.”
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Even With the Subsidies, Low BTC Prices Have Made Mining Into an Expensive Exercise
Brekken’s not wrong–while the exact carbon footprint of the Bitcoin network is not known, it’s estimated that the network takes as much energy to run as some small countries.
However, Norway native and CCN Publisher Jonas Borchgrevink pointed out that Brekken’s comments about greenhouse gasses may be invalid due to the way that electricity is produced in Norway. “99% of the electricity is produced by hydropower, and we continue to expand with wind power-, offshore wind power-, solar energy- and bio-energy facilities… We are in excess of green energy.”
“Why would a “green nation” punish miners companies from Norway, encouraging them to re-establish elsewhere and get a higher carbon footprint? It is plain stupid,” he wrote in a CCN report.
Even with the subsidies, it still costs about $7,700 to mine a single Bitcoin. With BTC prices hovering around $4,300, that’s a 56 percent loss.
The Decision-Making Process Has Raised Eyebrows
However, Norway native and CCN Publisher Jonas Borchgrevink pointed out that Brekken’s comments about greenhouse gasses may be invalid due to the way that electricity is produced in Norway. “99% of the electricity is produced by hydropower, and we continue to expand with wind power-, offshore wind power-, solar energy- and bio-energy facilities… We are in excess of green energy.”
“Why would a “green nation” punish miners companies from Norway, encouraging them to re-establish elsewhere and get a higher carbon footprint? It is plain stupid,” he wrote in a CCN report.
“This is shocking! [To change] framework conditions without discussion, consultation or dialogue with the industry,” the statement said. “Norway scores high on rankings of political stability and predictable framework conditions, but now the government is playing a gambling role with its credibility.”
Some blockchain industry members in Norway have welcomed the decision. Blockchangers CEO Jon Ramvi told Aftenposten, “Less mining in Norway will reduce the prices of electricity for companies and people residing in Norway, meaning that we reap the benefits of these resources locally instead of giving it away to Bitcoin miners.”
The decision comes in the midst of a massive mining war between two groups of individuals who support different versions of the Bitcoin cash network, a battle that has sent crypto prices into a tailspin.
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