Norway Bitcoin Miners to pay full energy bill since January

Norway Bitcoin Miners to pay full energy bill since January

Many people have been asking themselves why are bitcoin miners rewarded if they make big profits, have a not scheduled job and also get tax cuts? Well, something will change as Norway has announced the end of power tax subsidy for Bitcoin miners since January 1st.

Norway says enough to Bitcoin miners

The government of Norway has decided to end the discount that data centres that produce cryptocurrencies have been getting in the last years. So, from January 2019, Bitcoin miners will have to pay regular electricity bill in Norway at a rate of $1.93 per kilowatt, a significant raise from the previous $0.05 paid for each kilowatt they used.

Miner companies were entitled to a discount in power prices as Norway offers tax credits for companies in the power-intensive industries with a capacity of more than 0.5 megawatts. However, Norwegian news outlet Aftenposten reported on Thursday the news that the government and the Parliament approved the new rule proposed by Norwegian Tax Administration, an agency of the Ministry of Finance.

“Norway cannot continue to provide huge tax incentives for the most dirty form of cryptographic output as bitcoin. It requires a lot of energy and generates large greenhouse gas emissions globally,” Norwegian parliamentary representative Lars Haltbrekken said recently to Aftenposten.

Bitcoins production cost in Norway is $7,700 per coin as noted by Germany based Bitcoin miner Northern Bitcoin. So, currently, companies in Norway are mining bitcoins with losses. The cost for bitcoin production in the Nordic country will be increased dramatically in January.

People vs miners?

People are against tax cuts to bitcoin miners as Norwegian people complain that those resources can be used by regular people as less mining will reduce the price local people should pay. On the other side of the news, the regulation would mean that Norwegian jobs on the cyber mining industry will migrate to Denmark or Sweden.

On the blockchain industry perspective, mining executives got the news with surprise, “this is shocking. Budgets have changed framework conditions without discussion, consultation or dialogue with the industry,” Roger Schjerva, chief economist of tech industry interest body, ICT Norway, said on Thursday.

Bitcoin resumes its downtrend

Bitcoin traded negatively on Thursday after a bounce performed on Wednesday. BTC/USD declined from $4,600 to close at $4,265. On Friday, the crypto king fell to $4,085 where it found support, and it bounced back to trade at current levels around $4,255.

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