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Norway Withdraws Electricity Subsidies For Bitcoin Miners

bitcoinminingfarm nov23

Norway stopped electricity subsidies for Bitcoin miners, according to its national news paper Aftenposten.

The move comes as sharp decline in the price of Bitcoin, the largest cryptocurrency, is forcing many btcoin mining operations to close down as they may no longer be profitable.

As per the report, the Norwegian government in its state budget said that cryptocurrency miners in the country will have to pay normal electricity tax from the New Year.

Like other power-intensive industries, larger mining firms receive the same electricity tax discount, and until now paid a low rate of 0.48 Norwegian oyra, per kilowatt. As of January 2019, this would increase to 16.58 oyra per kilowatt, following an amendmend to the state budget agreement. An oyra is 100th of a Norwegian krone.

Norwegian parliamentary representative Lars Haltbrekken stated that Norway cannot continue to provide huge tax incentives for the most dirty form of cryptographic output like bitcoin. It requires a lot of energy and generates large greenhouse gas emissions globally.

Forbes earlier reported, citing data from crypto miner Northern Bitcoin, that Norwegian farms are able to mine Bitcoin at an average cost of $7,700 per coin with the currently advantageous electricity subsidies.

It was also reported that only major mining firms in the country are still making profit from Bitcoin mining, while smaller miners reported negative revenue for the first time this September amid higher electricity costs.

Bitcoin mining procedure requires highly powerful computers and consumes enormous electricity. The significant growth in demand for cryptocurrencies with its skyrocketing value had brought many new firms in this business.

As the value of bitcoin plummets, these farms are struggling to be profitable. US-based mining firm Giga Watt recently was forced to file for Chapter 11 bankruptcy for failing to pay around $7 million in debts.

In China, where majority of bitcoin mining operations are held due to low power costs, a group of miners reportedly shut down 20,000 mining rigs.

Bitcoin was trading at $4,395.14 as of 4.40 am ET, down 3 percent over a 24-hour period.

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