- Norway just passed a law that could potentially allow it to evict Bitcoin (BTC) mining firms.
- The new rule was anchored on the high energy use and emissions of their operations, which critics were quick to dispel.
Norway’s New Crypto Mining Law
Norway’s legislature just passed a new law that will require data reporting from data centers. Its main focus is the regulation of cryptocurrency mining, which siphons a huge slice of the energy grid. Of course, the most impacted by this new rule would be Bitcoin mining firms.
Time and again, Bitcoin’s reliance on a proof-of-work (PoW) protocol has always been criticized. Basically, this methodology is employed to verify the accuracy of transactions taking place within the blockchain. The trade-off, however, is it’s an energy-intensive process. This was the reason why the US government previously attempted to conduct an Energy Information Administration (EIA) survey to probe the actual energy use of crypto mining firms, especially those engaged in Bitcoin mining, only to be thwarted by the advocates of the digital asset.
The Norwegians are undeterred in their effort to curb the progress of this thriving industry though. By far, the country has been one of the top destinations of Bitcoin miners due to its cheap electricity and favorable climate that helps cool their rigs. Arcane Research’s 2022 report estimated that Norway makes up 0.22% of Bitcoin’s global hash rate.
The nation’s Digitalization Minister Karianne Tung and Energy Minister Terje Assland confirmed that the new law is indeed directed to crypto mining in general. Unfortunately, the ultimate aim of such legislation is to shut the country’s door to this sector.
“The purpose is to regulate the industry in such a way that we can close the door on the projects we do not want,” Tung stated in an interview with VG.
Meanwhile, Aasland explained that it’s a way to ensure the prioritization of “socially useful” services and infrastructure in terms of energy allocation. He cleared out that neither crypto nor Bitcoin mining belongs in those categories.
“It is associated with large greenhouse gas emissions, and is an example of a type of business we do not want in Norway,” Aasland said with a nod of approval from Tung. “They are not welcome in Norway.
“We want serious actors who are important to society, and the society-serving computer industry is important to us,” the Energy Minister added.
Critics React to Norway’s Impending Bitcoin Mining Ban
Critics like Daniel Batten, a managing partner of CH4 Capital, were quick to point out the flaw in the argument of the Norwegian legislature regarding Bitcoin mining. For him, their pronouncements just show that they don’t understand the mechanics of Bitcoin and the process it takes to mine its blocks. He also cleared out on X, “It’s Bitcoin mining, not crypto mining that’s happening in Norway.”
The co-founder of CH4 Capital further schooled the people on social media that since Bitcoin is a fully-electrified industry, it does not produce emissions like electric vehicles (EVs). Like EVs, its underlying power source has secondary emissions. In the case of Norway, which sources its energy from renewable hydroelectric plants, it would have presented a very favorable setting for Bitcoin mining, which does not negatively impact the environment.
“Bitcoin mining has an ultra-high 55% sustainable energy usage, higher than any other global industry or major industrialized nation,” Batten went on. “That’s the industry you’re attacking?”
Lastly, Batten highlighted that such a rule is discriminatory since it only targets a certain sector.