In the world of crypto mining, access to low cost power is everything. Without power subsidies, the cost of mining cryptocurrency can quickly escalate and cause mining firms to go bust due to the huge bills from energy companies. Currently, miners in Norway enjoy a nice discount on the price of electricity, however the deal runs out at the end of the year – meaning miners will have to pay full whack for their power come January 1st. This could force a lot of miners to seek alternative countries for mining where power is heavily subsidized.
Favorable Conditions are Long Gone
In a bid to grow Norway’s crypto mining industry, the government introduced subsidies on power for all mining farms that have a capacity over 0.5 megawatts. These miners would only pay $0.00056 per kilowatt hour, but under the new rules coming into effect on January 1st, these miners will now pay $0.019 per kilowatt hour. While the jump might not seem that significant, it’s in fact a 3292.86% price increase.
An Abundance of Alternative Locations
Miners looking to relocate their operations are in luck, there are plenty of new jurisdictions where mining crypto is highly affordable and is actually welcomed. Iceland stands out as one of the most favorable crypto mining jurisdictions thanks to its sub-arctic temperatures and abundance of cheap geothermal energy. This ultra-low-cost power comes from a clean and green source that has a near infinite capacity, making it some of the cheapest power on the planet.
If Iceland doesn’t quite fit the bill for miners, Canada is quickly becoming a hotbed for crypto mining activity thanks to its hydroelectric power plants. A number of top crypto mining firms have secured exclusive off-grid power deals with hydroelectric plants, as a means to secure low-cost and green energy. Argo mining is just one of the many mining firms looking to take advantage of this green and low-cost power in Canada.
Mining Consumes a Lot of Power
Environmentalist groups have been attacking Bitcoin since it became mainstream. They say that it’s bad for the environment and is a major contributor towards global warming. In fact, there are a number of other practices we humans enjoy that consume far more power and give us a lot less in return – Christmas lights are one of those pleasures.
Christmas lights consume 0.6% of all the power in the US every year after only running for a couple of weeks. To put that into perspective, around 2% of all power consumed in the US is for crypto mining. If Christmas lights were used all year round, Bitcoin mining would hardly seem so bad.
Many politicians in Norway fought to extend the power subsidy for crypto miners, but they simply couldn’t muster enough force to overpower the numerous politicians who feel the subsidy is unfair on regular consumers. This could directly impact Norway’s crypto industry and it could temporarily harm the total Bitcoin network hash rate until miners set up in new locations.