No More Electricity Subsidies Could See Tough Times Ahead for Norwegian Cryptocurrency Miners
One of the obstacles to cryptocurrency mining is that it consumes a lot of electricity. Norwegian miners have been spared this expense by the government through an electricity subsidy scheme. However, this is expected to change come 2019 as there are reports that this subsidy will be scrapped entirely.
Cryptocurrency mining companies in Norway are classified in the same category as conventional energy-intensive companies. To this end, they too pay a subsidized electricity bill of 0.48 ore per kilowatt-hour. Considering that the ordinary charges are about 16 ore per hour, this equals about 3% of normal rates. However, these companies will be required to pay the full price come January 2019.
Protecting The Environment
News of the Norwegian government’s plan to scrap electricity subsidies for the cryptocurrency mining industry was reported by the International Business Times. Apparently, the government did not consult the crypto mining industry before making the change. To this end, the government did not bother explaining why it had come to the decision either.
However, Lars Haltbrekken, a representative at the Norwegian Legislature, hinted that the decision may have been inspired by the runaway environmental pollution associated with crypto mining.
Cryptocurrencies A Disaster For The Environment
Speaking to reporters about the recent news, Mr. Haltbrekken said that the Norwegian government would no longer continue facilitating the operations of the “dirtiest form of cryptographic output” – he was also keen to mention Bitcoin, the most mined cryptocurrency, by name.
Research indicates that the increased appetite for cryptocurrency mining is a ticking time-bomb for the environment. According to research, mining cryptocurrencies uses more energy than is required to mine platinum or copper – in the case of Bitcoin it uses even more energy than is required to mine gold. For instance, Bitcoin usage solely contributed to over 69 million metric tons of carbon dioxide in 2017 alone. It is also estimated that about 17 megajoules were required to mine just $1 worth of Bitcoin – copper, and platinum, on the other hand, requires only 4 megajoules for the same worth.
Global temperatures could rise by as much as 20 C by 2033 should Bitcoin and other cryptocurrencies get adopted at steady rates. To this end, serious discussions are being held by this side-effect of cryptocurrency mining and usage – the fact that more and more governments are banning cryptocurrencies does not help this cause.
Consequences For The Norwegian Crypto Mining Industry
The Norwegian cryptocurrency mining industry has been taken aback by this news. The main issue of concern is the astronomical prices that they will have to pay come 2019 – their operational costs may rise by as much as 93%. Analysts are also worried that crypto mining investors who were attracted to the Norwegian market may be scared off. It is also possible that the complications that will arise from this change will also impact miners and cryptocurrency users in Denmark and Sweden.
The cryptocurrency mining industry is at its most competitive. Unfortunately for Norwegian miners, their position will soon be weakened by an end to existing electricity subsidies. Miners in the country will pay as much as 93% more for their electricity bills come 2019.