Norway terminates energy subsidies for cryptocurrency miners

Summary:

• European Commission invites major banks to blockchain initiative

• Bitcoin (BITCOIN on xStation5) managed to bounce higher after plunging beneath previous low

• Candidate in Nigerian presidential elections has significant plans related to blockchain

The underperformance of the cryptocurrency sector continues on Friday. The major digital coins take a step back with Dash (DASH) and Ethereum Classic (ETHERCLASSIC) being one of the biggest laggards. Bitcoin (BITCOIN), the biggest and most famous cryptocurrency, is taking a minor step back today trading close to previous lows. The capitalization of the whole cryptocurrency market dropped to $141.5 billion.

Ripple (RIPPLE) managed to avoid a steep sell-off during the latest cryptocurrency market plunge. Nevertheless, the coin also some downward pressure as of late. However, the virtual currency managed to defend previous swing level at $0.395 what may be seen a promising sign. Source: xStation5

Let us begin with the news from the European Union where the process of establishing the blockchain forum has begun. The European Commission asked at least five big banks, including the Spanish Santander, to help it develop trusted, secure and resilient European Blockchain Services Infrastructure. The idea is to promote blockchain technology among the EU member states and citizens. According to the European Commission required trust can only be build by cooperation of the public and private sector. European Commission hopes that the European Union will become leader in the blockchain development due to the cooperation.

When it comes to Bitcoin (BITCOIN) the price range that held firm since mid-June seems like a distant past. The coin plunged briefly below previous low around $4290 but managed to recover since. Nevertheless, outlook looks blurred. Source: xStation5

Period of declines on the cryptocurrency market is hurting not only virtual currency holders. The cryptocurrency mining companies find it harder to stay profitable amid falling coin prices and rising energy output needed to mine additional virtual currencies. Energy subsidies granted by governments were one of factors that helped stay mining companies afloat. However, this days may be soon over, especially in Norway. The local government decided that energy subsidies granted to energy-intensive companies are not suitable for cryptocurrency mining companies due to the disastrous impact such activity has on the environment. Having said that, Norwegian government decided that bitcoin miners will now pay a standard rate per kilowatt hour, which is 34.5 times higher than what was charged earlier. A number of cryptocurrency mining companies decided to move their operations to Norway due to favourable climate conditions, that led to lower cooling costs, and energy subsidies. However, now it cannot be ruled out that we will see a massive exodus of those firms from the country.

Just as Bitcoin, Dash (DASH) tested its previous low over the night. However, Bitcoin managed to bounce reasonably higher while DASH did not. The latest price action and the pin bar candlestick pattern painted on the H4 interval suggest that retest of lows may be looming. Source: xStation5

At the end let’s say a word about a country that may become key player in the blockchain sphere in the future although no one mentions it right now. Atiku Abubakar, one of the candidates in the Nigerian presidential elections, said that he has a specific plan for the blockchain technology and will implement it if he is elected for president. The plan consists of creating a legal policy that will regulate the blockchain sphere and make it more beneficial for the African country’s economy. However, the most interesting part of the plan relates to the education system. Abubakar wants blockchain to be taught as early as in primary school. Of course, much will depend on the quality of lecturers but given that it will be at decent level the country may become a birthplace of many blockchain geniuses. While cryptocurrencies have as many supporters as opposers, the blockchain technology itself receives a widespread applause. Given increasing adoption in business and economy, such a shift in approach to education could pay back quickly.