Norway Removes Tax Breaks for Bitcoin Mining as Crypto Firm Labels it a ‘Disaster’

A parliamentary representative named Lars Haltbrekken told Aftenposten.no:

The change is astronomical in nature. Currently miners pay about 0.48 Øre – or just 0.0005 USD – per kilowatt hour. This is in line with other high energy consumers of 0.5 megawatts or more. However, after January 1st, they will pay the normal electricity tax rate of 16.58 Øre, or roughly two cents – in tax alone – per kWh. The reaction from pro-business Norwegians was not favorable.

According to Bitnodes, there are just 48 full Bitcoin core nodes operating in Norway at time of writing. While “Bitcoin” is often used interchangeably by people less familiar with it, it can be extrapolated from that figure that the number of mining operations in the country is probably does not number in the thousands, across cryptocurrencies. Meaning that while the move, which takes effect at the beginning of 2019, will not necessarily be a huge setback to the Bitcoin mining network as a whole, it definitely will have an impact on the decision of miners in the future regarding Norway as a viable place to start and/or do business.

Forbes’ coverage of the matter cites a company called Northern Bitcoin as claiming that a Bitcoin costs about $7,700 at present to mine in Norway. Whether or not this is accurate, the cost of electricity in mining will increase. Mining profitability varies on a number of factors, particularly the size of the mine. The ideal mine has a lot of machines mining 24/7, which means that power is consumed and used even when there is no actual profit being had. The recent downturn in the global price of cryptocurrencies is sure to have a secondary effect on the profitability of Norwegian miners, making it an all-around unfriendly zone for Bitcoin miners.