As Bitcoin continues its downward spiral, miners in Norway face a new challenge. Norway ends electricity subsidies for cryptocurrency mining, adding pressure to an already struggling industry.

Local media reports say that starting in January 2019, Bitcoin miners will pay the country’s standard electricity tax. Their previous discount was removed from the state budget agreement.

Northern Bitcoin, a German-based mining company that also operates in Norway, says the average cost of mining a Bitcoin in the country is $7,700. The company claims it can mine Bitcoin and other digital assets more cheaply in Norway, using fjord-based cooling and renewable energy.

Lars Haltbrekken, a Norwegian parliamentary representative, commented on the decision.

“Norway cannot continue to provide huge tax incentives for the dirtiest form of cryptographic output like Bitcoin,” he said. “It uses enormous energy and causes significant greenhouse gas emissions worldwide.”

Energy Subsidy Changes Impact Miners

Presently, Bitcoin data centers and miners share the same discount given to other industries that use intensive power. What this means is that “those with a capacity of more than 0.5 megawatts pay 0.48 Krone ($0.05) per kilowatt.” From next year, this figure is expected to increase to 16.57 Krone per kilowatt.

Not surprisingly, this news has not gone down well with everybody. The tech industry in Norway has made their disapproval about the subsidies changes known, while simultaneously asking for support from the government.

Roger Schjerva, the chief economist of ICT Norway, described the development as “shocking.” In his words, “Budgets have changed framework conditions without discussion, consultation, or dialogue with the industry. Norway scores high on rankings of political stability and predictable framework conditions, but now the government is gambling with this credibility.”

On the other hand, there are others who are delighted with the subsidies removal. One of them is Jon Ramvi, the Chief Executive of Blockchangers, which is a blockchain advisory group based in Oslo. According to Ramvi, “This is a win for the Norwegian people and our natural resources. 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.”

In conclusion

Norway ends electricity subsidies as Bitcoin miners in the country face new challenges. The government has moved to put a stop to electricity subsidies for both Bitcoin and cryptocurrency miners. Effective from January 2019, miners will have to pay the normal electricity tax after the removal of their discount in the state budget agreement.

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