Best Bitcoin Card for Norway

Crypto currency, that sounds cryptic and it is. After all, a crypto currency is a digital currency that is independent of banks and functions in the sense of a medium of exchange. This type of payment was created in the course of the financial crisis of 2008. The idea behind it is good in itself, but over the years the goat has become a gardener. It basically starts with the fact that nobody, except for a few nerds, understands in such detail how the trade with crypto currencies works. I’m quoting a YouTube channel that deals with financial transactions: “We also had our difficulties to work out the technical details.”

I’ll try to explain a few basic points

Crypto currencies, of which there are around 3000 and of which the Bitcoin is the best known, are transferred from person to person (peer-to-peer) without banks being involved. The money is stored in wallets, i.e. virtual wallets that are located on the user’s computer.

So far, so good. Now, however, things are getting complicated. Let me take the Bitcoin as an example. There are a limited number of Bitcoins worldwide, namely 21 million. A so-called Miner, a modern type of gold digger, generates Bitcoins and validates payments. So a miner is a kind of guarantee for the transactions and generally safeguards the financial system.

Worldwide payments are collected in blocks (blockchains) with virtual locks. These locks, i.e. extremely complicated codes, must first be cracked by the miners before the transactions can be carried out / validated. Many miners work on a block, but only the one who cracks it fastest (!) receives a reward in the form of bitcoins. As time goes by, it becomes more and more difficult to crack the virtual locks because there are fewer and fewer bitcoins, which in turn requires more and more computing power.

Miners are now earning from code cracking and transaction fees

The actual problem is cracking the extremely complicated codes. In various countries there are now entire “farms” in which Miner is working on decryption and thus on financial profit using countless high-performance computers. Apart from the fact that such a branch of industry is created that no longer has much to do with real economic activity, and thus somehow reminds me, at least for me, of the artificial world of hedge funds, the computers used consume an incredible amount of electricity. At the moment (end of 2018), the equivalent of Austria’s total electricity consumption for crypto currency calculators is being used. In a year and a half they could consume as much electricity as the USA does today. Until 2024, according to scientist Harald Lesch, it would be mathematically conceivable that, if farms continue to spring up like mushrooms, the entire energy consumption of the world could only be used for the high-performance computers of the miners. Provided, of course, that there is no technological progress in the field of electricity consumption. But even if one takes very timely (!!) innovations into account, the scenario is likely to be a gloomy one.

Norway, along with Iceland, was previously considered a model country for crypto currency farms, as the computers here are supplied with green electricity. Norway subsidised the settlement of the data centres with extremely favourable electricity tariffs. However, the demand was clearly underestimated. This demand is so strong that if all projects were implemented, the annual electricity consumption would be 61.2 TWh. This would then correspond to 46 % of the current electricity consumption, which corresponds to 132.9 TWh. Originally, a maximum consumption of 1.2 TWh in 2020 and 3.5 TWh in 2035 was assumed.

They underestimated the situation and the danger enormously

Norway now consequently pulls the rip cord and wants to put an end to the madness that was certainly well meant at the beginning, or rather pull the plug. Electricity subsidies will be abolished from 1 January. The price will increase from 0,48 Øre (0,043 Euro) per kilowatt/h by 35 times to 16,58 Øre (1,70 Euro) per kilowatt/h.

From my point of view the decision is right, very important and good, but of course it comes very suddenly and spontaneously for the respective companies.