Norway is one of the biggest global oil producers, but the country has excelled in another type of mining. According to a recent report by Arcane Research, the Nordic country already accounts for almost 1% of Bitcoin’s (BTC) hash rate. On top of that, this entire hash rate is generated entirely by renewable energy. As BTC mining is quite localized, miners are able to keep their production profitable. According to Arcane, hydropower is the main source used by Norwegian miners. The country also has very affordable energy costs, which makes the activity more profitable.
For a long time, Norway was mentioned in the context of BTC mining in a negative light, usually for its intense energy consumption. In May 2021, for example, Forbes cited that BTC miners absorb more energy than some countries. Norway ended up being used in this context. However, currently the country now hosts a significant amount of the BTC hash rate. Although 0.77% is not a big figure, the percentage is relevant considering Norway’s reduced territorial and population size. As the Arcane report pointed out, Norwegian mining is quite diverse. On the one hand, the country has small industries such as Kryptovault and Arcane Green Data. On the other hand, miners like Northern Data, Bitdeer, Bitzero and Cowa already have a more global reach. Two reasons lead miners to choose Norway as their mining hub. First, the country enjoys great political stability and good regulatory conditions. According to the World Bank, Norway ranks 9th in the world for ease of doing business. Second, the country has a cold climate – which favors mining – and low electricity prices. The Norwegian energy cost is around US$0.03 to US$0.05 per kilowatt hour (kW/h), one of the lowest in Europe. At the same time, the cold climate further reduces the heating costs of the machines. Finally, the Norwegian government offers a reduced energy tax to members of the industrial sector. This incentive goes for BTC miners, which makes energy even cheaper.
Green Mining and Greenpeace
The fact that green mining is prevalent in Norway is yet another rebuttal to the recent attacks suffered by BTC. The latest such action was taken by the environmental NGO Greenpeace, which called for changes to the mining algorithm. The Greenpeace campaign gained support from Chris Larsen, co-founder of Ripple. Larsen donated $5 million to the NGO to launch a campaign against Proof of Work (PoW). The campaign title is quite suggestive: “change the code, not the climate”. However, the case of Norway is further evidence that such concerns may be overstated. Ray Nasser, CEO of mining company Arthur Mining, said Greenpeace has the wrong focus. For him, the change must come from the mining companies, and not from the code.
“The solution is to encourage miners to embrace clean, renewable energy instead of trying to change the Bitcoin consensus protocol. Study is lacking. More than 50% of the global mining industry uses renewable energy and this number is increasing dramatically,” he said.
The data cited by Nasser is confirmed by the Bitcoin Mining Council (BMC), which in its 2021 report reported that more than 50% of the BTC hash rate comes from renewable energy sources. Also read: Gemini: Brazil and Indonesia lead global cryptocurrency adoption Also read: MicroStrategy buys 4,167 Bitcoins for $190 million