In a groundbreaking move, Bitcoin miner Marathon Digital has teamed up with Zero Two, backed by Abu Dhabi’s sovereign wealth fund, to establish the Middle East’s first large-scale immersion Bitcoin mining operation. This alliance occurs simultaneously as the White House urges for new tax policies which could see crypto miners in the US paying an amount equal to 30% of their energy costs.
The joint venture, titled Abu Dhabi Global Markets JV Entity (ADGM), aims to initially develop two mining sites with a collective capacity of 250 megawatts (MW) of mining power. The mining facilities will utilize excess energy in Abu Dhabi, bolstering the sustainability and base load of the Middle Eastern capital’s power grid. Necessary mining equipment and infrastructure have already been ordered, with construction underway.
Ownership of ADGM will be split, with Zero Two holding an 80% stake and Marathon owning 20%. The initial capital contribution of around $406 million will also be divided according to these proportions.
Differing from the predominant air cooling technology utilized by digital asset miners, immersion cooling in high heat and humid conditions presents significant advantages for miners operating on tight profit margins. This partnership serves as a prime example of such benefits, as the desert climate of Abu Dhabi renders air-cooled digital asset mining unfeasible. A Marathon and Zero Two immersion cooling pilot program demonstrated notable reductions in necessary maintenance for ASIC miners to effectively generate hash rate.
Marathon’s CEO, Fred Thiel, expressed enthusiasm for the collaboration with Zero Two, noting it as a “pivotal moment” for the company. The partnership signifies an eagerness to establish next-generation Bitcoin mining facilities in Abu Dhabi.
While this Middle Eastern partnership is pioneering in its adoption of immersion cooling technology, the potential US tax on crypto miners could provoke stark contrasts in the development of sustainable mining operations around the world. The potential tax imposition may impede further innovation and expansion in the US mining sector, while countries like Abu Dhabi seize the opportunity to establish themselves as leaders in this fast-growing market.
In light of these circumstances, the future of cryptocurrency mining could see a distinct shift in focus towards eco-friendly solutions and developing infrastructure aligned with sustainable practices. The pioneering work of Marathon and Zero Two might serve as a catalyst for further innovation within the industry, leading to the emergence of more efficient, environmentally-conscious technologies in digital asset mining on a global scale.