Norway Has Change Of Heart For Bitcoin Miners As Country Halts Its Power Tax Subsidy
Crisis Ahead: Norway Ends Power Tax Subsidy For Bitcoin Miners
When you hit rock bottom, it can only get worse, or at least is what the Bitcoin miners in Norway must be thinking right now. The Norwegian government has decided that it no longer supports BTC mining and has decided to cut the power subsidy that it was granted to crypto miners in the country.
The story, which was originally reported by Aftenposten, a Norwegian media outlet. From New Year onward, the government has decided that the tax subsidy for miners was over and that they would have to pay normally starting in 2019.
It is important to notice that many power-intensive industries in the country receive an electricity tax discount, however, Bitcoin miners will stop to receive it. Before the end of the subsidy, any crypto mining companies with a capacity of more than 0.5 megawatts were charged only 0.48 ore per kilowatt hour instead of the normal rate of 16.58 ore per kilowatt hour. For comparison, 100 ore are equal to a single Norwegian krone.
This means that the miners that were eligible to receive the subsidy were paying only 2.8% of their electricity and now they will have to pay it fully.
Bitcoin Requires Too Much Energy
The main argument from the Norwegian government is that the country is simply not able to provide huge tax incentives for cryptocurrencies because, according to them, it is one of the dirtiest forms of cryptographic output as it requires a massive lot of energy and it generates too much greenhouse gas emissions.
Lars Haltbrekken, the Norwegian parliamentary representative that talked about this matter, has affirmed that the decision from the government is final and that the crypto miners will have to pay more taxes now. This will make their profits fall even further, which will certainly be a problem for them, but the government of one of the most progressive countries in the world simply does not feel like supporting something that is energy-intensive.
Is Bitcoin Mining Doomed?
It is fair to wonder how viable it will be for these companies to continue their operations now. Without the subsidy, these companies will have to spend a lot more money in electrical energy and the price of Bitcoin is falling even further now.
With the lasting bear market, the industry is facing one of its toughest times. The fact is that most companies will simply end being bankrupted, which is what happened with Giga Watt this week, as the company declared bankruptcy revealing that it owed 7 million USD for creditors.
It will certainly be a lot more difficult to make business in Norway now, a location that was mostly chosen because of its cold climate and its tax incentives. Members from the industry have affirmed that the decision of the government is shocking and that they completely changed the framework without any discussion or consultation for the industry, which will push the companies out of the country.
Certainly, the government simply was not interested in having Bitcoin miners anymore, it is obvious that they will move to countries like Sweden and Denmark now, as they will hardly be able to keep a sustainable business otherwise.