Norway Pushes Back on Crypto Mining

According to a recent Reuters report, Norway’s government is looking to crack down on cryptocurrency mining activities. Specifically, they are looking to stop the creation of any new data centres that facilitate crypto mining.

Anyone who is familiar with the crypto industry will tell you that mining is one of its most important activities. For proof-of-work protocols like Bitcoin, it is the means by which new tokens come into existence. At the same time, it is a very energy-intensive process. The process of mining involves completing a complex mathematical puzzle to confirm transactions on the blockchain. This uses a lot of energy, and there have been several examples of people moving in pursuit of cheaper electricity or even stealing it to support their activities.

But as the crypto industry only continues to grow and we develop more use cases, mining will only be in high demand. In Norway, for example, placing wagers with cryptocurrency is much more common, and the more people want to use crypto in this way, the more demand there will be for miners to supply the tokens. A recent article by gambling expert Maja Farstad highlights how much traffic crypto casinos have seen in recent times.

Perhaps it is this explosion of demand that has caused the Norwegian government to take its stand against them. It is worth noting that Norway has been an especially popular place to set up data centers. Because it is such a cold country, it costs very little to cool down computer equipment, which saves a lot of money. As such, many crypto companies have moved their mining operations to Norway and other such countries.

A part of the frustration is that despite this influx of mining operations, there has not been as much job generation as the government would like. With this in mind, there is less support for these mining operations, and this is reflected in recent legislation.

Last year, a law was introduced that required mining operators to disclose more information about their data centers. Around the world, there have been varying levels of pushback against crypto mining. You have countries like China where crypto mining is outright banned, and they have conducted raids where the government has seized mining equipment. You also have places like Kuwait that have worked to curb unauthorised crypto mining because of its impact on the national power grid.

This, along with the criticism the crypto industry has seen because of its intense energy use, means a crypto miners will have an interesting few months ahead of them. On the one hand, crypto consumers need their efforts more than ever, and it is more profitable to enter the crypto market these days. On the other hand, finding cheap and accessible electricity to power mining projects is proving to be more challenging.

We can only hope that these mining operators can find resources to cater to their energy needs and, in turn, continue to keep the crypto industry alive and well.