As cryptocurrencies continue to redefine the financial landscape, crypto mining remains one of the supporting crucial pillars. Crypto mining has been under discussion recently due to its high energy use, leading to more carbon footprints. As a result, many countries have banned crypto mining or made it expensive to push away crypto miners. In Europe, some countries have stepped up to become crypto-mining hubs with attractive resources and favorable regulations. This article looks into the best European countries favorable for crypto mining. Let’s dive in:
Iceland has become one of Europe’s bitcoin mining refuges. The nation’s access to inexpensive electricity and entrepreneurial citizens made it one of the first nations outside China to achieve industrial-scale bitcoin mining.
Iceland is one of the largest aluminum manufacturers in the world; hence people are used to exporting excess electricity through manufacturing that involves energy intensiveness. This background gives the country a good understanding of Bitcoin mining and its use in monetizing stranded energy. For the benefit of players against global electricity price inflation, the nation has cut off its electrical infrastructure from the rest of the world. Furthermore, Iceland’s electricity comes from renewable sources, so there are no linkages between it and the rest of Europe.
Miners have operated in the region without regulatory concerns for the past ten years, making it the most stable global crypto mining zone. Jaran Mellerud, a researcher on bitcoin mining, estimates that Icelandic bitcoin mining uses roughly 120 MW or 1.3% of the world’s total hash rate output. Iceland has a population of 370,000 people, making it the world’s largest hash rate output per capita.
Some domestic companies participating in crypto mining in the country are Greenblocks, Borealis Data Center, and Advania Data Centers. As for international players, Bitfury, Hive, Genesis Mining, and Startmining, they have been part of the crypto mining sector in Iceland.
Malta is a small island nation in the Mediterranean and is not usually considered a global leader in technology and innovation. However, the country has become a global stable for the crypto industry and is attracting big players in the crypto mining sector globally.
The Maltese government has supported the crypto industry since 2018 by passing three pieces of legislation for blockchain and cryptos. These laws established a regulatory framework for ICOs, crypto-related businesses, and crypto exchanges, making the country one of the top crypto-friendly countries.
The government introduced the Malta Digital Innovation Authority (MDIA) to oversee crypto companies and blockchain regulation. It also developed the Virtual Financial Assets Act (VFA) bill, which provides a regulatory regime for brokers, wallet providers, advisers, ICOs, crypto exchanges, and asset managers. The government also created the VFA regulations, which outline crypto service providers’ future registration and accountability.
Overall, Sweden has an attractive tax incentive system and a clear and friendly crypto regulation which has brought fruitful results in its contribution to the crypto sector.
As for its crypto mining industry, it has no restrictions on mining activities due to its belief that cryptocurrency and blockchain is an evolving and promising technology that needs to be promoted and studied.
Amid the rising energy prices in Europe largely due to the Ukraine war, Sweden is one of the areas that have remained a crypto mining hub where mining is still profitable. Although the crowd has thinned out, the country has an ideal environment for data centers.
The country generates well above 1% of the Bitcoin hashrate, currently hosting about 150 megawatts (MW) of mining. Some prominent international players seeking a home in the country are Northern Data, Hive Blockchain, and Genesis Digital Assets. The main reason that Sweden has attracted main players in the industry is the abundance of renewable energy.
Sweden introduced a 98% tax cut for data centers in 2017 to attract businesses. However, four years later, the industry has yet to achieve its goal of creating as many more jobs as it intended due to the change in the macroeconomic environment. As a result, the European country is introducing a new tax to abolish the tax incentive for data centers from July, causing a 6,000% increase in taxes per kilowatt hour of energy.
Georgia has slowly grown into a top mining country in the world. The country has attracted crypto mining due to its inexpensive electricity, business-friendly atmosphere, and unregulated currency market. It has an abundant hydroelectric power supply and low electricity rates, which attracts miners looking to cut energy costs. So far, over 100,000 people are participating in crypto-mining activities nationwide.
Georgia set its corporate tax rate at 15%, which applies to crypto mining, and a 5% tax on distributing dividends which is significantly lower than other crypto mining countries. In addition, they have no capital gains taxes, which makes it an attractive destination.
Despite its location and small population, Norway has become a top mining hub in Europe. The country has attracted crypto miners due to access to cheap electricity, increasing profits. Jaran Mellerud, a Norwegian researcher, highlights that the Norway grid operator estimates that the electricity price will remain low in the north until 2027.
The cryptocurrency industry consumes a lot of energy and is getting heavily criticized for its high carbon footprint. As a result, cryptocurrency miners prioritize operations that use renewable energy. Due to its mountainous terrain and humid climate, Norway has abundant hydropower, making it attractive for crypto mining companies. Some top crypto mining companies that have moved to Norway are COWA, Bitzero, Bitdeer, and Northern Data. Other smaller companies that have moved into the region are Arcane Green Data and Kryptovault.
Last year in May, a bill was introduced to ban Bitcoin mining but was rejected after presentation in the Norwegian parliament. Norway is also not a member of the European Union, which has imposed the Markets in Crypto Assets (MiCA) regulations which have brought heavy restrictions on Bitcoin mining.
Russia has managed to become the world’s second-largest crypto mining hub this year, according to Bitriver, Russia’s largest bitcoin mining provider. According to the Russian Ministry of Finance, the country’s miners generate about $4 billion in crypto, which amounts to about $1.2 billion in profits. The government, earlier this February, introduced tax incentives for crypto miners.
While there has yet to be a clear cryptocurrency framework due to conflicts between the crypto-friendly Ministry of Finance and the anti-crypto Russian central bank, local crypto adoption continues to thrive.
In the latest news, crypto mining might become legal in Russia as soon as 2024, according to Anatoly Aksakov, Chairman of the State Duma Committee on Financial Market. Furthermore, he stated that the first reading of four bills would legalize crypto mining in July, and the State Duma would adopt the bill.
Crypto mining profitability is highly dependent on choosing the right location. Crypto miners must consider energy costs, climate, regulations, and infrastructure when conducting mining operations. From Iceland’s low energy costs to Georgia’s renewable energy, these European nations offer attractive opportunities for crypto miners to profit.