According to a report published by the largest newspaper in Norway, Aftenposten. the Norwegian government decided to remove electricity subsidies given to Bitcoin mining entities. Reporting from BTCManager, subsidized electricity rates in one of the Scandinavian countries are used by cryptocurrency miners around the world to regulate their mining operations. The fact is, crypto mining facilities in the country pay very little, US $ 0.05 per kilowatt. However, after the amendment to the state budget agreement, the electricity cost was set to increase to around US $ 2 per kilowatt. The new tariff will take effect from January 1, 2019.
The representative of the Left Socialist Party (SV), Lars Haltbrekken, supported the government's decision stating, "Norway cannot continue to provide enormous tax incentives for the dirtiest types of cryptocurrency expenditures [Bitcoin] that require a lot of energy and produce large greenhouse gas emissions globally . "This development will provide a further blow to the newborn digital currency industry. Not surprisingly, this step will trigger a large exodus of crypto mining companies from Norway. Not to mention the recent industry has been damaged with considerable losses in market capitalization, because the price of bitcoin fell almost 25 percent in one week.
It should be highlighted that according to the German bitcoin mining company Northern Bitcoin, currently it takes around US $ 7,700 to mine bitcoin in Norway. However, with electricity subsidies missing from the mining industry, these costs are expected to increase quite significantly starting 2019. Globally, the cost of mining bitcoin in Norway is in the middle position. Miners in Canada and China enjoy low bitcoin mining costs, namely US $ 4,000 and US $ 3,100. Conversely, the cost of bitcoin mining can reach $ 10,000 in Australia.
One of the Norwegian technology sector actors, Roger Schjerva, Norway ICT Chief Economist, criticized the regulation by stating, "The budget changes the conditions of the framework without discussion, consultation or dialogue with industry. Norway gets a high score in terms of political stability and predictable framework conditions, but now the government is speculating with this credibility. "Crypto mining is a profitable side business in previous years, but now shows a decline in popularity. Bitcoin mining has been hit in recent months, especially since the end of the first quarter 2018. The CMCManager reported that US bitcoin mining giant GigaWatt filed for bankruptcy in Washington, which made it the final victim of the price of falling crypto prices.