The country has attracted a sizable Bitcoin mining industry that is completely carbon-free.
According to a recent Arcane Research analysis, Norway has emerged as an appealing location for the Bitcoin mining business. Not only does the country create about 1% of the global hash rate, but it is also totally fueled by renewable energy.
What makes Norway unique?
When Norway is referenced in relation to Bitcoin, it is frequently to highlight Bitcoin’s high energy use. Last May, Bitcoin miners consumed more electricity than some small countries, including Norway.
However, within its own boundaries, the country now hosts a considerable portion of Bitcoin’s overall hash power. While 0.77 percent may not seem like much, it is a sizable proportion given Norway’s tiny size and population.
According to Arcane’s research, the industry there is made up of minor local firms such as Kryptovault and Arcane Green Data. It does, however, include several major global players such as Northern Data, Bitdeer, Bitzero, and COWA.
Part of the rationale is due to Norway’s political stability and favorable regulatory environment. The country ranks ninth on the World Bank’s Ease of Doing Business Index and provides a lower electricity tax to members of the industrial sector, which includes Bitcoin miners.
Another reason for Norway’s attractiveness is its low electricity rates, which are among the lowest in Europe. For the last five years, prices have fluctuated from $0.03 to $0.05 per kWh across the country, with prices as low as $0.01 per kWh in 2020.
The precipitous dip that year was caused by unusually heavy precipitation, which swiftly filled up Norway’s hydropower reservoirs. After all, the country’s hilly terrain and wet climate allow it to be powered by hydroelectricity 88 percent of the time. Norway is nearly 100 percent green, with another ten percent generated by wind.
The Advantages of Green Mining
This is significant for Bitcoin miners, who have experienced widespread public and media criticism for their alleged carbon footprint. Indeed, Ripple’s co-founder is currently co-funding an environmental campaign with Greenpeace to have Bitcoin’s code delete its proof of work consensus mechanism, which is what allows the mining sector to exist.
However, Norway’s popularity demonstrates that energy concerns around Bitcoin may be exaggerated. The Bitcoin Mining Council reported in 2021 that renewables were already powering more than half of Bitcoin’s hash rate.