A previous report made it known that the government of Noway has granted subsidy to bitcoin miners located in the country. However, based on a recent report, the same government has scrapped the same subsidy.
Bitcoin Miners to Pay Normal Rate by 2019
According to the source of the report, the country has made it known that as from next year, 2019, bitcoin miner in the country will start paying for their electricity at the normal rate.
Currently, all large mining firms located in the country are placed on a reduced electricity tariff, just like other power-intensive industries in the country.
In the existing payment plan, large mining firms with a capacity of more than 0.5 megawatts are charged only 0.48 øre ($0.00056) per kilowatt hour instead. Comparing this to the standard rate of 16.58 øre ($0.019), this is a huge discount for the mining firms. Going by this figure, large-scale miners in the country are paying just 2.8 percent of the standard rate to power their rigs.
According to the Norwegian parliamentary representative Lars Haltbrekken, the country is no longer ready to support bitcoin mining as it considers them a slap against its moral conduct. This was confirmed in a statement he made recently. He stated that: “Norway cannot continue to provide huge tax incentives for the dirtiest form of cryptographic output like bitcoin. It requires a lot of energy and generates large greenhouse gas emissions globally,”
Once the new rate comes into effect, miners will have to pay more to mine. As a result of this, the profit margin will be way lesser than what it used to be. This is expected to send these miners packing. Eventually, most of them will move to nearby countries.
Norway is Playing a Gambling Role with its Credibility
The ICT community in the country has however spoken out against this decision by the government. A comment was also issued by the chief economist of tech industry interest body, ICT Norway, Roger Schjerva. He stated that:
“This is shocking. Budgets have changed 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.”