The Kingdom of Bhutan, situated in the Eastern Himalayas, has been secretly running a state-owned bitcoin mining operation using its vast hydroelectricity resources for several years. With the price of Bitcoin first reaching the $5,000 mark back in October 2017, the Bhutanese government’s exact timeline of involvement in mining remains undisclosed.
Similar operations have also been spotted in El Salvador, another country harnessing power from volcanic sources to mine Bitcoin. The Latin American nation went a step further and established Bitcoin as its legal tender.
While the exact location of Bhutan’s Bitcoin mine and its profitability are still unclear, a collaboration with Nasdaq-listed mining company Bitdeer has been confirmed. The partnership aims to generate 100 MW out of the 550 MW power supply from Bhutan. The construction of the mining data center is expected to commence in 2023 with completion set for 2024.
Bhutan’s massive purchase of computer chips, with imports totaling $193 million in recent years, further indicates the country’s involvement in a large-scale Bitcoin project. The decision to mine Bitcoin may be due to the vast resources the country has and the hydropower capacity generated from numerous local rivers. Bhutan is known to produce an abundant amount of electricity, exporting 75% of its annual generation to India during the rainy season.
While some believe it’s time for the Bhutanese government to disclose its Bitcoin mining efforts, others argue that the country must tread carefully due to the risky nature of cryptocurrencies and their environmental burden. Nonetheless, if Bitcoin’s value continues to rise, profits garnered from mining could greatly benefit the country and help establish a foothold in the cryptocurrency trade sector.
El Salvador serves as an example of a country embracing the Bitcoin revolution, adopting it as legal tender and mining it with energy harnessed from local volcanoes. The Central American country’s innovative approach also includes plans for a high-tech town called “Bitcoin City,” which will use Bitcoin as its official currency and power itself with geothermal energy from nearby volcanoes. The city’s futuristic design has won an international award for architecture and interior design.
As more countries begin exploring the benefits and challenges associated with integrating cryptocurrencies like Bitcoin, the transparency of operations and environmental impact becomes crucial. As Bhutan and El Salvador move forward with their mining ventures, only time will tell if the projects turn out to be profitable and sustainable in the long run.