Norwegians celebrate as noisy BTC miners shut down

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Not long ago, CoinGeek reported on how Russian President Vladimir Putin warned that BTC miners were causing blackouts in certain regions. Russia responded to residents’ complaints by regulating mining and offering miners first dibs on excess energy in other areas.

Now, residents of Stokmarknes in Norway are celebrating as a KryptoVault BTC mining facility closes down. The tiny outpost in Northern Norway has a population of just under 3,500, but residents have made dozens of noise complaints about the mining facility over the past few years. Some likened the noise to a 24/7 sawmill, complaining that they had to close their windows just to sleep at night.

While the Norweigan government has proposed regulations to slow the growth of energy-intensive data centers and digital currency mining facilities, this isn’t the reason for the closure; KryptoVault went bankrupt in 2023.

Block reward miners are under severe pressure

While the residents of Stockmarknes are glad to see the back of KryptoVault, its investors probably don’t feel the same way. Yet, it’s not the only block reward miner under pressure. Just this week, Riot Platforms (NASDAQ: RIOT) and Marathon Digital (NASDAQ: MARA) stocks have dropped 53% and 44%, respectively, since the beginning of 2024.

What’s causing the miner selloff on Wall Street? In short, there is a lack of profitability, and the excess cash is drying up rapidly as miners try to ride out the storm that often follows halvings. As the block reward halves every 210,000 blocks (the halving), inefficient miners go bust, further centralizing the network in the hands of a few powerful players who can absorb the losses until weaker competitors tap out.

Over the years, BTC proponents have attempted to dismiss and laugh off concerns about the economics of the system, but finally, the reality of Bitcoin mining economics is catching up. BTC has not doubled in value after this halving, and the bull run that allegedly always follows it has been a damp squib, leaving miners struggling to make ends meet.

Could this be because Tether is under extreme scrutiny by authorities as market manipulators like Sam Bankman-Fried serve prison sentences? Or is it that interest rates are higher and easier and less risky returns are available elsewhere? Perhaps it’s a combination of both? Each reader can answer for themselves, but the disappointment is palpable on X and other platforms where traders hang out.

Worst bull market ever.

Crypto is about to lose all its retail interest.

— ImNotTheWolf (@ImNotTheWolf) June 18, 2024

The era of utility is finally here

While there may or may not be one last (relatively lame) BTC bull run, ever since FTX went bust and one of the industry’s wonderboys was exposed as a giant fraud, large enterprises, governments, and investors have been figuring out that ‘crypto’ was all a ruse.

However, they’re also figuring out that blockchain tech has utility outside of speculation; real businesses offering legitimate solutions can harness it to create change. Just look at what CERTIHASH is doing in cybersecurity or how FICO is using blockchain to ensure its AI’s decisions are fair and transparent.

The world has slowly started to realize that the Bitcoin blockchain is a decentralized ledger that can enable peer-to-peer micropayments, leaving a transparent audit trail for all transactions. That means miners like GorillaPool will own the future; while others have been playing the short-term game of mining for digital pixie dust, it has been ramping up capacity to process millions and eventually billions of microtransactions per block.

Will miners like Marathon and Riot make it through another cycle or will they follow KryptoVault into the abyss? Who knows, and who cares? The world has moved on, and finally, blockchain technology’s awesome potential is being realized. The miners who figured out Bitcoin’s economics early and prepared accordingly will soon get the market share they deserve.

Watch: Gorilla Pool provides end to end solution for ASIC mining