How Norway Has Become Europe’s Biggest Bitcoin Mining Hub

Mining centres are constantly changing with the emergence of new nations as regional centres. Norway is leading the charge in Europe due to its plentiful energy reserves

Bitcoin mining in Norway takes advantage of abundant stranded hydropower. Consequently, it attracted multinational corporations like bitfury, cowa, bitzero, and bitdeer. Furthermore, local firms include Kryptovault and Arcane Green Data.

Other advantages of Norway include differences in prices between different regions. As the largest producer of hydroelectricity in Europe, Norway is also blessed with abundant renewable energy. Hydroelectricity represents 92 per cent of the country's electricity, of which 7 per cent comes from wind.

On 25 January, Jaran Mellerud of HashRate Index, a Norwegian national, explained why the country has become the epicentre of Bitcoin mining in Europe.

Bitcoin Mining Boom

The researcher estimated that Norway's Bitcoin mining industry uses about 250 megawatts of energy. "This energy consumption is expected to account for a Norwegian share of global hashrate production of nearly 3%," he added.

Additionally, Bitcoin miners operate in the central and northern parts of the country due to more expensive energy in the more populous south. Transport constraints have lowered energy prices in the central and northern parts of the country.  

The Norwegian network operator believes that electricity prices will remain low in the north until 2027, said Mellerud.

However, the government is not a major fan of the mining industry, increasing miners' energy tax by $0.014 per kwh this year. Nevertheless, in May 2022, a bill proposing the banning of Bitcoin mining was rejected by a majority vote in the Norwegian parliament.

In addition, Norway is not an EU Member State. The EU’s proposed Markets in Crypto Assets (MiCA) regulations impose heavy restrictions on Bitcoin mining activities.

In light of all of these factors, Mellerud concluded:

“Bitcoin miners likely have at least five good years left in a stable country with low power prices and excellent operating conditions.”

CTB Mining Prospects.

The profitability of mining, or "grinding price", has reached its lowest level in December. Since the beginning of the year, the hash price has risen by 32% to $0.078, according to HashRate Index. Measurement is measured in USD per day per terahash per second ($/d/h/s).

Additionally, the network hash rate is back up following a December dip. According to BitInfoCharts, the hash rate is currently 265 EH/s (exahashes per second) which is not far off its peak of almost 300 EH/s earlier this month.