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Norwegian government plans to regulate crypto mining
Norway plans stronger regulation for crypto mining. Find out why the mining sector is “not welcome” in Norway and the impact of Bitcoin’s immense power consumption. #CryptoMining #NorwayRegulation #BitcoinElectricity consumption
Norwegian government plans to regulate crypto mining
Norway plans to increase regulation of the crypto mining sector due to the huge electricity consumption associated with the cryptocurrency Bitcoin. This move is supported by the Norwegian government to create greater transparency through registration and disclosure requirements. Digitalization Minister Karianne Tung and Energy Minister Terje Aasland announced that a law is planned to distinguish socially beneficial data centers from environmentally harmful crypto mining projects.
Energy Minister Aasland stressed that the cryptocurrency industry is not welcome in Norway as it is not in line with the country's goals. The aim is to promote serious actors who are socially relevant. Norway plans to become the first European country to introduce comprehensive regulation for data centers.
Bitcoin’s massive energy consumption has led to criticism and concerns. According to the Cambridge Bitcoin Electricity Consumption Index (CBECI), the global Bitcoin network consumed approximately 172.10 terawatt-hours in 2023, consuming more electricity than countries such as Poland and Egypt. In comparison, Ethereum is based on a proof-of-stake mechanism that uses significantly less energy.
The US and China are leading locations for Bitcoin mining, while Norway has only a small share. Despite banning mining in 2021, China still ranks second in terms of hashrate. Despite efforts to reduce mining, it is difficult to effectively stop operations.
The criticism of Bitcoin's high power consumption is also related to the network's high CO2 emissions. At the end of April 2024, around 87 million tonnes of CO2 equivalents were emitted annually, mostly from the use of fossil resources. Bitcoin contributes 0.18 percent to global greenhouse gas emissions, putting it ahead of countries like Greece and on par with Israel in terms of emissions.