Norway’s Electricity Subsidy Cut for Bitcoin Mining: Impact and Reactions

Norway’s Bold Move

Norway has decided to turn off the electricity subsidy tap for Bitcoin mining facilities. According to Aftenposten, as of January 2019, the cost of electricity for these power-hungry operations will jump from a mere 0.48 øre (around $0.05) per kilowatt to a whopping 16.58 øre per kilowatt. This change is part of an amended state budget agreement and is meant to curb the energy-intensive nature of Bitcoin mining.

The Rationale Behind the Decision

Lars Haltbrekken, a representative from the Socialist Left Party (SV), made headlines by vocally supporting this initiative. He labeled Bitcoin mining as “the most dirty form of cryptocurrency output,” citing its enormous energy consumption and significant greenhouse gas emissions. Haltbrekken clearly believes that it’s time for the land of fjords and reindeers to put its foot down.

Industry Fallout: Criticism and Support

The industry’s response has been a mixed bag. Roger Schjerva, chief economist at ICT Norway, expressed his outrage, stating, “This is shocking! [To change] framework conditions without discussion… is akin to political roulette.” With Norway often praised for its stability, such rapid changes leave the industry reeling.

However, not everyone is throwing a fit. Jon Ramvi, CEO of Blockchangers, sees the silver lining. He argued that less mining translates to cheaper electricity for local companies and residents – a win-win for the Norwegian populace.

Understanding Bitcoin’s Mining Landscape

As highlighted by Forbes, the current favorable conditions have allowed Norwegian miners to churn out Bitcoin at an average cost of $7,700 per coin. But with recent shifts, only the big players seem to stay profitable. A report from Diar did not sugarcoat the situation, revealing that smaller miners are facing negative revenues due to rising electricity costs.

The Future of Bitcoin Mining in Norway

This subsidy removal isn’t just a local issue; it’s part of a broader global conversation about energy consumption in cryptocurrency mining. With Bitcoin’s network security not hinging on the number of miners, as pointed out by Ramvi, Norway’s future may involve rethinking its energy strategies beyond just accommodating miners.