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Norway Removes the Subsidy for Bitcoin Mining Farms

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Recently on Nov 21st, Norway's largest printed newspaper Aftenposten reported that Norway has decided to end the subsidy for Bitcoin mining farms as Norwegian government labels Bitcoin as "the dirtiest form of cryptographic output" and cannot continue providing incentives to support it.

Scandinavian countries like Norway charge taxes on electricity supply. Now, Bitcoin miners will have to pay the normal tax on electricity from January 2019.

Lars Haltbrekken, Norwegian parliament representative said, "Norway can not continue to provide huge tax incentives for the most dirty form of cryptocurrency output [...] [Bitcoin] requires a lot of energy and generates large greenhouse gas emissions globally."

Along with other heavy power consumption industries, mining farms were also paying a very low price of 0.48 ($0.05) per kilowatt. After this recent amendment of state budget agreement, bitcoin and other cryptocurrency mining farms have to pay 16.58 per kilowatt.
Lars Haltbrekken, Norwegian parliament representative said, "Norway can not continue to provide huge tax incentives for the most dirty form of cryptocurrency output [...] [Bitcoin] requires a lot of energy and generates large greenhouse gas emissions globally."

As per a recent Forbes report, the Norwegian farms were able to mine Bitcoins at the rate of only $7,700 per coin. This was all possible because of the subsidies provided by the Norwegian government. With Bitcoin already hitting a fresh low this week, this subsidy removal has come as a shock to the Bitcoin miners. As a result, miners will have to pay more taxes, thus decreasing their profit percentage. The Government's hard decision has both been criticized and welcomed by people.
Chief ICT economist Roger Schjerva has issued a statement of discontent, "This is shocking! [To change] framework conditions without discussion, consultation or dialogue with the industry. Norway scores high on rankings of political stability and predictable framework conditions, but now the government is playing a gambling role with its credibility."
Some have lauded this move of the Government by stating that it will help provide electricity at cheaper costs to everyone. Jon Ramvi, CEO of Oslo-based blockchain advisory group Blockchangers said, "less mining in Norway will reduce the prices of electricity for companies and people residing in Norway, meaning that we reap the benefits of these resources locally instead of giving it away to Bitcoin miners." He also added "more miners in the Bitcoin network does not make it faster or scale better. The only function of more miners is securing the network further," to stress on the point that the need of more miners is not required now as the security of the BTC network is of a good level.

Chief ICT economist Roger Schjerva has issued a statement of discontent, "This is shocking! [To change] framework conditions without discussion, consultation or dialogue with the industry. Norway scores high on rankings of political stability and predictable framework conditions, but now the government is playing a gambling role with its credibility."

There are speculations that with the rise in the price of electricity for miners, they will be pushed to countries like Sweden and Denmark. The recent downfall in the prices for Bitcoin combined with the taxation on electricity has turned Norway into an inhospitable place for Bitcoin miners.
Even in such conditions, big players in the market are still able to mine a good amount of coins but the small miners paying retail electricity bills will suffer losses if they mine bitcoin after the electricity price increase.

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