Cryptocurrency mining involves surfing a large amount of electricity. And as the crypto industry has become widespread in recent years, it has also expanded mining activities, leading to this Electricity shortages in some countries like Iran and Kosovo.
Similarly, the Norwegian government, facing the same issues, is now planning to rescind its previously implied policy of taxing crypto data centers with lower taxes than other industries. The Minister of Finance of Norway, Trygve Slagsvold Vedum, proposed scrapping the system, which typically affects Bitcoin mining farms operating within the state.
Related reading: Why the EU will sanction all Russian crypto transactions and wallets
Minister urges crypto mining to generate higher power demand
Citing the increasing demand for electricity, the minister said added;
We are in a very different situation in the electricity market today than when the reduced tariff for data centers was introduced in 2016. In many places, the electricity supply is now under pressure, which is leading to rising prices. At the same time, we are seeing an increase in cryptocurrency mining in Norway. We need this power for the community.
The proposal to scrap tax subsidies for miners comes after Norway’s finance minister unveiled the country’s annual budget for 2023. According to his findings, the abolition of the reduced tax policy will generate $14 million in revenue.
According to data from the Cambridge Bitcoin Electricity Consumption Index, Norway is currently generating a 0.74% global bitcoin hashrate. A large number of bitcoin mining centers use 100% renewable energy sources.
The growing problems of crypto mining in Norway
In the middle of the previous month, bitcoin miners were also criticized by Sortland, a municipality in northern Norway. Locals cited that the noise problem disturbing the environment stems from mining and wanted the miners to stop.
Additionally, a communist party, the Red Party, passed legislation in March to outright ban cryptocurrency mining in the country. But fortunately, the proposal was rejected by Parliament in May, as only left-wing parties supported the idea.
Regarding the rejection of the bill, Arcane Research analyst Jaran Mellerud said: pointed out back then;
After losing that vote, these political parties will likely make another attempt to increase the electricity tax specifically for miners, which is now their only tool left in the toolbox to make life miserable for crypto miners.
State police seized nearly 9,404 mining equipment in districts of the Iranian capital Tehran, according to an Iranian media outlet in August. The power outages the country faced last summer prompted the agency to investigate and seize unregistered mining platforms.
Related Reading: Data shows high profit-taking on these cryptocurrencies
In addition, Iran had already confiscated a large part of the mining farms in June, which corresponds to 7,000 mining machines. It also disconnect the electricity from 118 licensed Mining platforms to meet the required power demand for the hottest summer months.
Featured image from Pixabay and chart from TradingView.com