Global warming and drought continue to have consequences on our lives and those of the business world. Kryptovault AS, a bitcoin mining company that was based in southern Norway, decided to move to the north of the country – right in the Arctic. The reason: electricity bills have skyrocketed in the south of the country due to the drought, which has emptied part of its hydroelectric reservoirs necessary for local electricity production, reports Bloomberg on Tuesday, August 9. While the latter were 74.9% full during the 2000-2019 period, they do not reach 50% today. However, the country produces the majority of its electricity thanks to its hydroelectric power stations: the shortage of water has therefore caused the bills to explode.
As proof, Kryptovault AS saw its bill double compared to last year – the latter represents 80% of its operating expenses, because the bitcoin mining activity is particularly energy-intensive. To operate the decentralized bitcoin platform, processors validate and process transactions made in bitcoin. The mining activity consists of solving a complex mathematical equation called “proof of work”. In exchange, the miner receives fragments of cryptocurrency. However, this system requires enormous amounts of energy.
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Faced with high electricity consumption and rising prices, the decision to move the company’s site to the north of the country was simply obvious to the company’s managing director, Kjetil Hove Pettersen – “a vital necessity”. In Antarctica, water is always abundant – which explains the abysmal price differences between the two ends of the country. North of the Arctic Circle, electricity is 160 times cheaper than in the south.
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