Hive Blockchain Technologies, following the elimination of a subsidy, sold its ancillary company namely Kolos Norway AS, to the Narvik municipality. The crypto mining firm under the agreed terms and conditions has transferred its shares to Narvik along with a payment of $200,000.
Hive Blockchain, a publicly-traded firm sold its Norwegian subsidiary to the municipality in which it is located. They did so because an electricity subsidy went away. This speaks of the laser focus that mining operations have on electricity costs in deciding where to locate their businesses.
These mining operations are often seen taking advantage of tax regulations. Kentucky recently passed legislation around mining as well. The legislation exempts cryptocurrency mining operations from tax in order to invite miners to the state. People just flock to where it is cheap to process Bitcoin transactions or to mine at all and this is something seen repeatedly. Mining is probably the most tangible aspect of any cryptocurrency. It is very easy to understand, there are only a few math problems to solve to see if it is profitable or not. In addition, energy consumption is one of those. Thus if a tax subsidy goes away it is no longer profitable to mine there and might as well move to a different location.
Scandinavia itself just kind of like in a broader picture is moving in a pro-crypto stance across the board. So while not necessarily mining itself, they have moved towards crypto generally because they have cheap electricity. It also kind of fits in line with the way people live life there, they are very conservative by nature. Now they are moving into the asset classes that are somewhat protectionary in a sense like a store of value.
Scandinavia is seen as a country that is perfect for mining crypto or Bitcoin because of a number of factors. Mining Bitcoin is a very energy-intensive process. Thus, a lot of Bitcoin mining is seen taking place in places like Northern Mongolia in China, Scandinavia, or Pacific North West. These areas are cold and mining Bitcoin is very expensive and hot so such locations provide you with the best temperature.
One of the biggest Norway companies in the entire country recently bought into Bitcoin mining and Bitcoin development itself. Scandinavia keeps making headlines with Bitcoin, whether positive or negative the narrative is that this block of the world is pro-crypto.
Scandinavia is typically considered to be crypto-friendly and they even introduced a tax incentive back in 2018. To see the tax relaxation being taken away now when the crypto market is booming is somewhat odd. They will transfer all the shares for this along with the $200,000 payment. It is going to be very interesting in the larger context of other local municipalities. They might start looking into either putting bitcoin in their balance sheets or even getting involved in mining directly.