New Crypto Mining Facility Investor Worth $116 Million Shys Away from Norway After Tax Changes
A foreign investor had planned to invest $116 million to build a crypto mining facility in Norway. However, it does not seem to be going forward because the country’s government has decided to exempt crypto mining centers from receiving tax subsidies.
According to Erik Vennemore of NTC Services, “It was about one billion [NOK] in investment. Everything was planned, and the data center should have been in operation as of July next year. Then the statement came from the government, and then it stopped the next way.” The country’s decision to deny data centers from receiving tax subsidies came from the Christian Democratic Party.
The party takes the position that such centers use a great deal of power in comparison to other types of data centers. Lars Haltbrekken, an environmentalist and parliamentary representative called bitcoin “the dirtiest form of cryptographic output.” He also added, “It requires a lot of energy and generates large greenhouse gas emissions globally.”
It is highly likely that the removal of the tax subsidy for mining operations will impact miners’ profits. Vennemore is concerned that the lack of subsidy could cause investors to move their investments from Norway to other countries, such as Denmark, Finland, and Sweden. He stated, “These countries offer so far low fees to all types of data centers, including those who use crypto.”
Currently, in Norway, it costs approximately $7,700 to mine one bitcoin. Other countries, such as China and Saudi Arabia offer much more affordable mining operations, at $3,100 per coin. According to Jon Ramvi of blockchain advisory group Blockchangers, “The only function of more miners is securing the network further. It means that if you want to hack the network, you will need to have more computational power than the other machines in the network. However, the bitcoin network has been extremely secure for over a year now so there should be no need for more miners.”
Mining operations in Norway essentially have two options. They can either stay and pay the higher tax, or they can leave. It’ll be interesting to see what happens.