Norway Removes Miners Electricity Discount Effective from January 2019
Another day, another Bitcoin woe and this time it is coming from Norway. In addition to the downward spiral of the original cryptocurrency, miners in Norway are grappling with the decision of the government to end electricity subsidies for cryptocurrency mining.
Local media outlets report that beginning from January 2019, Norway’s Bitcoin miners will be paying the country’s normal electricity tax after their discount was expunged from the state budget agreement.
According to the Northern Bitcoin, a Bitcoin miner based in Germany, the average cost of mining Bitcoin in the country is $7,700 per coin. The miner, who also operates in Norway claims that he can mine Bitcoin and other digital currencies at a discount through the use of fjord-based cooling systems and cheap renewable energy.
Lars Haltbrekken, a Norwegian parliamentary representative made his thoughts known in the local media about the new development: “Norway cannot continue to provide huge tax incentives for the [dirtiest] form of cryptographic output as Bitcoin. It requires a lot of energy and generates large greenhouse gas emissions globally.”
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.”
Bitcoin miners in Norway are not finding it easy as the country’s government has moved to put a stop to electricity subsidies for both Bitcoin and Cryptocurrency miners. Effective from January 2019, miners in the country will have to pay the normal electricity tax after the removal of their discount in the state budget agreement.
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