A push to prohibit the energy-intensive proof-of-work mining of cryptocurrencies in Norway has been rejected by the majority of lawmakers. The ban had been suggested by the far-left Red Party which also didn’t win backing to raise an electricity tax for crypto miners.
Norway Will Not Ban Bitcoin Mining
The parliament of Norway has considered and voted against a draft law banning the minting of digital currencies based on the proof-of-work concept. The legislation, which was proposed by the communist Red Party in March, was supported only by two other leftist parties, SV (the Socialist Left Party) and MdG (the Green Party).
“We are obviously disappointed with the majority here,” Red lawmaker Sofie Marhaug told the E24 news portal. She added that the Norwegian society must determine its priorities regarding power usage. Her party says bitcoin mining is extremely energy-intensive and insists on putting an emphasis on the needs of other industries and climate change goals.
However, as Marhaug pointed out, the majority in the Storting, Norway’s legislature, wants to prioritize the market, and “give the bill to Norwegian electricity consumers.”
The Red also failed to win support for a proposal to revise the electricity surcharge for mining data centers, accusing the Labor Party (Ap) and Centre Party (Sp) of breaching a pre-election promise. The two parties had announced they would seek a full electricity fee for mining farms.
While households, many businesses, and the public sector currently pay 0.15 kroner (approx. $0.02) per kilowatt-hour of spent electricity, the industry, including data centers, enjoys a reduced levy of just 0.0055 kroner per kWh.
In February, the Norwegian government said it will try to avoid imposing a crypto ban, but made it clear it was considering various measures regarding the electricity consumption in the sector. In November, Norway admitted it’s mulling over ways to limit the environmental impact of bitcoin minting and may support a Swedish proposal for a European ban on proof-of-work mining.
“In a time of energy scarcity and challenges with cutting emissions, it is particularly harmful that power is wasted only to enrich individuals rather than being used for socially beneficial purposes,” the three leftist parties said. However, the parliamentary majority has objected to the politically motivated discrimination against mining data centers.
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Hive has taken aim at the Norwegian government’s decision to revoke subsidies on power consumption that are available to energy-intensive industries operating in Norway. The legislative bill moving to revoke cryptocurrency miners’ access to the subsidy was passed in early December and is expected to take effect during March of this year.
As a result of the legislative changes, Hive states it will conduct an assessment of the impact of the bill on the economics of its sole Norwegian asset, the ‘Kolos’ data center.
Twenty-two-year-old cryptocurrency miners from the Norwegian municipality of Harstad, Philip Eriksen and Roy Arne Olsen, have become the subject of national media attention following their reported incomes for 2017 of less than $20,000 USD, despite Mr. Eriksen’s admittance during December 2017 that he owned 34 bitcoins – then valued at approximately NOK 5.5 million (nearly $657,000 USD). During the same month, Mr. Olsen told local media: “Having an unrealized million wealth in cryptocurrency after two years is a fantastic […] feeling,” according to a rough translation.
Astrid M. Dugstad Tveter, a spokesperson for The Norwegian Tax Administration, stated: “The person who has bought, sold, mined or has values placed in virtual currency, such as bitcoin, must report this in the tax report.” Whilst not wanting to comment on individual cases, Mrs. Tveter also emphasized deductible debts, for example from a mortgage, can significantly reduce the value of an individual’s net assets.
Norwegian mining and data center company, Kryptovault, has reportedly received a bomb threat amid intensifying complaints of noise pollution. Kryptovault currently operates facilities in the Norwegian cities of Follum, Honefuss, and Dale.
The managing director emphasized that Kryptovault’s employees had been instructed to be extra vigilant in conducting their operations, especially those based in the company’s Dale facility. If any abnormal behavior is observed at the site, the company’s employees have been instructed to evacuate.