Norway
5. Some Countries have banned Crypto-Currency
There are a few countries where you can’t enjoy crypto-currency rights as they have been banned. Here’s the list:
• Algeria
• Bolivia
• Ecuador
• Nepal
• Bangladesh
• Cambodia
Crypto-Currency in Norway: A brief overview
Norwegians are the most optimistic about Crypto-currencies compared to citizens of other European countries. 73% of Norwegians think crypto will still exist in 10 years, but it won’t necessarily be Bitcoin, indicates bitFlyer research. In comparison, only 57% of UK citizens share the belief that Crypto-currency will survive the next decade.
The Nordic region is famous for its high rates of technology adoption and a large number of fintech startups, so it is no surprise that Norwegians are positive about Crypto-currencies.
Sweden and Finland didn’t participate in the research, but it seems that optimism towards Crypto-currency would also be high in these countries.
Additional research shows that every fifth person in the world is planning to buy Bitcoin or other digital coins within the next five years, but what stops many people from doing so is the lack of knowledge. A local survey by Arcane Research shows that 11% of Norwegians would buy Crypto-currency if there was an easier way to do it. This means that half-a-million Norwegians are potential crypto-buyers.
Despite high competition between digital wallets, buying Crypto-currencies for the first time is still a challenging process: firstly, you need to research a reliable wallet provider, then in many cases pass a complicated KYC procedure by connecting the Crypto-currency world to standard Bank-ID technology.
Unsurprisingly, the survey by Arcane Research indicates that Crypto-currency adoption is at the highest level among people under 40. For citizens in the 18-39 age group, 8%
confirmed that they already own Crypto-currencies, compared to 3% in the 40-49 group and 2% in the 50-59 group. It is very likely that many teenagers under the age of 18 (the age group not covered by the survey) also own digital currencies. As they grow older and enter the active workforce, we can expect them to increase the rate of Crypto-currency adoption.
A major difference in the 2019 research, compared to previous studies, is the growing number of women who own Crypto-currency. However, Crypto-currency adoption among the female population is still at the low level of 3%.
Half of Norwegians who already own Crypto-currency have used it for transactions and other non-speculative purposes. “This shows that many of those who work with Crypto- currency are interested in more than just speculation. However, it also shows that we are far from a situation where Crypto-currency is part of everyday life for most people,” says Torbjørn Bull Jensen, CEO of Arcane Crypto.
The Crypto-currency market still faces a lot of challenges, but it will keep growing at a rapid pace. The easier it becomes to transact with Bitcoin, Ether, EOS or any other currency,
at several cafes in Oslo, pay for a holiday house in Nybergsund, repair a smartphone in certain places, purchase web hosting, gifts and even marketing or advertising services. Torstein Thinn from Skatteetaten says that around 60,000 people in Norway are already trading Crypto- currencies.
Norwegian Crypto-Currency Policy
The Norwegian Financial Supervisory Authority issued warnings against Crypto- currencies both in 2013 and 2018. It has also warned against initial coin offerings (ICOs). Both warnings came as a result of warnings by the European Supervisory Authority, ESMA.
The Central Bank of Norway has not recognized Crypto-currencies, but it also does not prohibit its staff from owning or investing in them as per ethical guidelines from November 23, 2012.
The Norwegian Tax Authority has issued a principle statement that bitcoins will be treated as capital property, at least for tax purposes. Capital property legislation allows deductions for losses and taxes winnings. Although travel currencies are exempted from the capital gains tax, bitcoins are not as the bitcoin and other virtual currencies are not recognized as travel currencies.
All Norwegian residents are required to report taxable income (including from capital gains such as those from Crypto-currencies) in accordance with the Norwegian Income Tax Act. Such income derived from Crypto-currencies should be filed as “other income.” Sales of Crypto-currencies are exempt from Norwegian value-added tax (VAT). In a 2013 statement the Norwegian Tax Authority determined that the sale of bitcoins by a commercial actor was subject to a 25% VAT as the trade in bitcoins on a web-based site is an electronic service subject to VAT and not a VAT-exempt financial service. However, in 2015 the Court of Justice of the European Union ruled that Crypto-currencies are exempt from VAT. This caused Norway to start a process whereby the Finance Department was to determine how bitcoins (and other Crypto-currencies) should be treated in relation to VAT. Final guidance was issued in 2017, establishing that the sale of Crypto-currencies is exempt from VAT.
Norway and it’s rising problems with Crypto-currency:
Deep beneath a mountain on the fjord-filled fringes of Norway, tucked within 28 kilometres of tunnels, are 15 shipping containers. Stacked three-high in neat rows, each container is filled with millions of dollars’ worth of computers that pump out thousands of dollars’ worth of digital currency each day through a process of electronic mining. Together with countless other operations around the world, these containers form the foundation of the bitcoin network.
Standing inside one of the 40-foot containers, the temperature is 45C and the roar of the cooling fans is so loud you can’t hear yourself speak. Unlike traditional money, bitcoin doesn’t have a central government or bank in charge of distributing and backing the currency. Instead, it relies on the processing power of computers to solve mathematical problems to generate new units of the cryptocurrency, while simultaneously verifying and recording any transactions on the network to an online ledger called the blockchain.
When bitcoin was first conceived in 2009, only a handful of regular computers were used and it was possible to mine the cryptocurrency from a laptop. But as its popularity grew, so did its energy needs. Almost a decade later, millions of these machines are required to support bitcoin and the 2,000 other cryptocurrencies that have since come into existence. Altogether, they consume more energy than the entire nation of Ireland.
“Bitcoin is essentially the monetisation of energy,” says Hass McCook, a chartered civil engineer who has spent the past four years researching the environmental impact of bitcoin and cryptocurrency. “It turns energy into hard money, meaning bitcoin miners are chasing the cheapest power in the world, not the cleanest. Unfortunately for the environment, that means most mining machines are in China, where the coal-generated electricity is cheap.”
Scientists say this has put the world on the brink of an environmental disaster. The carbon emissions produced by the vast energy demands of bitcoin could push global warming above 2C in just two decades, according to a recent study in Nature Climate Change. The subterranean complex that houses these containers could be the key to preventing such a catastrophe.
Until 2009, the mountain was home to a much more traditional type of mine, which saw millions of tons of the mineral olivine excavated annually, before it shut down for nearly 10
outside the container and corkscrewing to the surface in a car, one of my hosts explains it’s not just the location that makes this bitcoin mining operation unusual.
“This whole place runs off green energy,” says Dr Hajo Durr from Northern Bitcoin, the Frankfurt-based cryptocurrency mining company which owns the containers. “For us it seems absurd to mine something so new with something so old, like coal. Bitcoin is the future of money and renewables are the future of energy. It’s the perfect fit.”
Inside another mountain on the other side of the Nordfjord fjord, just a short ferry ride away from the Lefdal mine, is where the power for Northern Bitcoin’s mining machines is generated.
The Askara hydro power plant, which was built in a hollowed out section dug one kilometre into the mountain, is fed by melting glacier water and reservoirs. It is capable of passing 17,000 litres of water through its turbines every second, enough to fill 100 large bathtubs. But this is nowhere near enough to meet its hydropower potential. The day I visited, a gushing waterfall nearby signalled that its magazines were full. “You may see a waterfall,” one of the workers said to me, “but all I see is wasted energy.”
Looking at Norway on a globe, it might not seem at first glance the country with the world’s second longest coastline. But zooming in on its fjord-filled fringes reveals 58,000 kilometres of shore that is topped only by Canada – carved out by glaciers that have made it the ideal place for hydro power to thrive. With such an abundance of clean energy, it’s no surprise that electricity costs in Norway are low.
The 200 megawatt capacity of the Lefdal Mine Datacentre would be two-and-a-half times more expensive to run in the UK, which is why more than just cryptocurrency mines are moving here. Technology giant IBM is moving in to make use of the server space to serve its European clients, thanks to its relatively central position in northern Europe.
At more than 50 metres below sea level, a near-constant temperature of 8C in the mine means Northern Bitcoin’s containers also need less energy to keep the machines cool. The adjacent fjord also acts like a fridge, with ice-cold water pumped in to help lower costs even further.
Thanks to this, the firm estimates it costs around $2,700 (£2,101) to mine a single bitcoin. At the cryptocurrency’s current market price of $3,800, this represents a profit of almost $1,100.
The final benefit is the mountain surrounding the mine, which also serves to smother the roaring breath of the machines’ fans. This last feature is not insignificant. A few hundred kilometres away, a major mining operation on the outskirts of Oslo recently provoked a barrage of complaints from neighbours disturbed by the noise. One anonymous local was so incensed by the constant whirring of the computers’ cooling fans that they sent the facility a bomb threat.
“This is sabotage,” the note stated. “If you are expanding crypto mining and filling the country with noise, then you will be sabotaging this peace. I am threatening to send you some explosives.”
An Overview of the Possible Solution:
Fortunately for the environment, there are signs that renewable energy costs are going in the right direction. A report from the International Renewable Energy Agency earlier this year found that continuous technological improvements combined with investments in green infrastructure projects means renewable energy will be cheaper than fossil fuels in two years.
The stark warnings of the Nature Climate Change study presume the bitcoin network will continue to rely on the carbon coughing mining operations in China and elsewhere. It also presumes that cryptocurrencies will continue to grow at the same rate as other broadly adopted technologies such as dishwashers and ebooks, leading some experts to cast doubts on the extreme outcomes predicted.
“While the future growth of cryptocurrencies like bitcoin is highly unpredictable, we do know that the global electric power sector is decarbonising and that information technologies – including cryptocurrency mining rigs – are becoming much more energy efficient,” says Professor Eric Masanet, who researchers energy and sustainability at Northwestern University in the US. “It appears the [study’s] authors have overlooked these two latter trends in their projections, while simultaneously insisting on tremendous growth in cryptocurrency adoption.”
Whether or not bitcoin will still be such an energy drain in a few years’ time is impossible to tell. It is worth less than a quarter of its value from one year ago, after the remarkable gains of 2017 were succeeded by a market-wide collapse this year. Two price crashes that occurred in quick succession in November caused dozens of bitcoin mining operations to shut down in the US and China, while a recent announcement by the Norwegian government to end electricity
subsidies for bitcoin mining facilities may even threaten the economic viability of mining companies like Northern Bitcoin.
If the price of bitcoin continues to fall and mining becomes even less profitable, then operations will continue to shut down around the world. The knock-on effect of this will be that the energy the network consumes will plummet and bitcoin’s environmental impact will no longer be such an issue.
The hot noise inside the shipping containers of Lefdal mine is only bearable for a short time.
In the entire history of money, it might only be a short time that bitcoin demands such intense consumption of resources. However, the potential growth of this industry that many see as inevitable means a solution is needed. These containers may offer a tiny piece of that solution, but the questions they ask of the cryptocurrency industry are huge. As Dr Durr puts it: “If bitcoin really is the currency of the future, it is essential that we consider the future of the planet.”
References
1) https://www.forbes.com/sites/bernardmarr/2017/12/06/a-short-history-of-bitcoin-and- crypto-currency-everyone-should-read/?sh=1a6992bc3f27
2) https://www.independent.co.uk/news/long_reads/bitcoin-cryptocurrency-mining- norway-energy-hydropower-climate-change-planet-a8640921.html
3) https://www.loc.gov/law/help/cryptocurrency/world-survey.php#norway
4) https://bitspace.com/the-status-of-cryptocurrency-in-norway/
5) https://www.expresscomputer.in/blockchain/9-facts-about-cryptocurrency-you-must- know/43175/
6) https://en.wikipedia.org/wiki/Cryptocurrency