How Norway Has Become Europe’s Biggest Bitcoin Mining Hub

Bitcoin mining centers are constantly shifting as new nations emerge as regional hubs. Norway is leading the charge in Europe due to its plentiful energy reserves.

Bitcoin mining in Norway takes advantage of abundant stranded hydropower. As a result, it has attracted multinational companies such as Bitfury, COWA, Bitzero, and Bitdeer. Furthermore, local firms include Kryptovault and Arcane Green Data.

Norway has additional advantages, like power price differences between varying regions. As Europe’s largest hydropower producer, Norway also has abundant renewable energy. Hydropower accounts for 92% of the country’s electricity, with 7% coming from wind.

On Jan. 25, HashRate Index’s Jaran Mellerud, a Norwegian national, explained why the country has become the epicenter of European Bitcoin mining.

Bitcoin Mining Boom

The researcher estimated that the Norwegian Bitcoin mining industry consumes around 250 megawatts of power. “This power consumption should equal a Norwegian share of the global hashrate production of almost 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. Transmission constraints have made energy tariffs cheaper in the country’s middle and north.  

Norway’s grid operator estimates that power prices will stay low in the north until 2027, Mellerud reported.

However, the government is not a big fan of mining, increasing the miner’s power 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.

Furthermore, Norway is not a member state of the European Union. 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.”

BTC Mining Outlook

Mining profitability or “hash price” has come off its December bottom. Since the beginning of the year, the hash price has risen by 32% to $0.078, according to HashRate Index. The metric is measured in dollars per day per terahash per second ($/d/TH/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.