The largest newspaper printed in Norway, Aftenposten, on November 21, reported that Norway plans to end the electricity subsidies for the Bitcoin mines in the country. The mining farms in the country, up to now, pay about 0.48 øre per kilowatt. This translates to around $ 0.05. This is the same amount paid by other industries dependent on power and is a subsidized rate. However, from 1 January 2019, the Bitcoin mines will have to pay 16.58 øre per kilowatt. This conclusion followed the agreement on the adapted state budget.
No more electricity subsidies for Bitcoin mining companies
Lars Haltbrekken, a vocal parliamentary representative for the Left Party, had a strong opinion on the matter. In his words:
"Our government can not continue to offer huge tax incentives for the crudest kind of cryptocurrency – Bitcoin." Creating Bitcoin requires a lot of energy and produces a lot of gas emissions around the world. "
Bitcoin (BTC) Price today – BTC / USD
Earlier this month, Forbes reported that the electricity subsidies provided by the Norwegian government offer many advantages to Bitcoin companies. It allows them to extract BTCs for $ 7,700 per coin. This is according to data from a criptovalute mining company listed in Germany in northern Norwegian Bitcoin.
The Aftenposten reports indicate that ICT Norway, a national interest group in the country has responded to government actions with strong criticism. Roger Schjerva, the chief economist of ICT, abruptly protested against the action. In these words:
"This is shocking! How can the framework conditions change without dialogue, consultation or discussion with the blockchain industry? Norway is one of the highest countries in terms of political stability.It has a predictable picture.Now, the government now plays dare with its credibility ".
While many in the blockchain industry are protesting against government action, there are some people in the same industry who are on agreement. The managing director of Blockchagers, a Oslo-based blockchain advisory group, said that a reduction in mining activities in Norway will reduce the cost of electricity for residents and companies based in Norway. This means that they will enjoy the benefits of this move on a local scale rather than let the Bitcoin miners appreciate everything.
Moreover, Ramvi said that a reduction in the number of miners on the Bitcoin network will be beneficial in terms of downsizing. According to him, fewer miners will propagate at a greater speed. The only reason why more miners enter the system is to protect the network. Ramvi says the Bitcoin network has been protected for more than a year so there is no need to incentivize more miners.
Recently, Diar, the weekly scrambled outlet, announced that the big time industry participants are the ones who make the most out of Bitcoin extraction. Small-scale miners who pay retail prices for electricity do not earn as much as they would if they had benefited from subsidies. In September, the increase in the cost of electricity meant that these dealers declared negative revenue for the first time in history.
Bitcoin mining is already more expensive than the purchase of Bitcoin, removing the subsidies on electricity for the Bitcoin mines, the cost for mining is set to increase.