Due to its relatively cool climate, which helps cool mining rigs, and abundant sources of renewable energy, Finland has quickly become a popular destination for cryptocurrency mining.
In addition, Finland’ s stable politics and economy are good for long-term investments such as cryptocurrency mining. However, various aspects such as electricity costs, regulatory environment and infrastructure availability need to be taken into account.
Lennu Keinänen, co-founder of cryptocurrency mining company Once Mining , based in Finland, told Cryptonews.com that miners in Finland see the country as an attractive location due to the unique situation where energy costs are close to zero during periods of overproduction, which has attracted the bitcoin mining industry to the Nordic region.
Finland remains Europe’s most unexplored frontier for bitcoin mining in Scandinavia, although for years its Nordic neighbors, Norway and Sweden, were seen as more desirable locations. Many cryptocurrency miners have headed to the region to seek refuge from rising electricity prices in 2022.
Due to the soaring price of hydro, nuclear, solar and wind power in Finland, electricity prices have plummeted to near zero by 2023. This year, the Nordic nation recorded a monthly energy surplus for the first time in nearly two decades. A Montel News report on European energy markets says experts predict that 25 TWh of renewable energy will be generated in Finland by 2030 , driving prices down further.
Since cryptocurrency mining requires a significant amount of electricity, low energy prices are essential for cryptocurrency miners. Miners’ profit margins increase as the cost of electricity decreases, as operating costs for mining equipment decrease. Since energy costs can significantly affect mining profits, companies often look for locations with easy access to electricity to maximize profits.
Keinänen explains that the Finnish government provides large subsidies for wind energy in order to increase renewable energy production and reduce greenhouse gas emissions. While well-intentioned, these subsidies have contributed to a rapid increase in wind power generation capacity. This, in turn, has affected energy production, increasing its volatility.
Naturalized wind energy is variable and depends on wind conditions. As a result, when the weather is favorable, there is overproduction of energy, which can lead to electricity prices falling below zero, reaching as low as -0.3 €/kWh. Conversely, during poor wind production, there can be underproduction, which can cause electricity prices to spike , sometimes reaching as high as €2/kWh.
According to the Finnish tax administration, cryptocurrencies must be taxed. Miners must pay tax on capital gains from selling, trading or spending cryptocurrency, as well as on income earned from activities such as cryptocurrency mining.
Keinänen continues: “The mining industry here is still in its infancy, but it will become quite significantin the next few years.”
He goes on to say that there is tremendous interest in opening mining sites, and there is constant discussion in Finland about site exploration.
Since Bitcoin mining requires a lot of energy, the cost-effectiveness of the process depends primarily on the price of electricity. As the cost of operating mining equipment decreases, lower electricity costs increase profits. As a result, places with low electricity prices are more suitable for Bitcoin mining.
