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Has Bhutan Been Quietly Mining Bitcoin Since 2017? (Report)

Has Bhutan Been Quietly Mining Bitcoin Since 2017? (Report)

The Kingdom of Bhutan, situated in the Eastern Himalayas and a landlocked country, has been utilizing renewable energy sources to run a bitcoin mining operation for years. A government representative stated that the process initially began when the value of BTC was around $5,000, which was the first time the primary cryptocurrency had reached that level in October 2017.

El Salvador is another country that has also used renewable energy sources to mine BTC. This Latin American nation became the first to accept bitcoin as legal tender within its borders.

Bhutan’s Secret BTC Mining Project

According to Forbes, Bhutan has established a state-operated bitcoin mine using their extensive hydroelectricity resources, which has not been publicly disclosed. A government representative stated that the nation started mining BTC “a few years ago as one of the early entrants when the price of bitcoin was around $5,000.”

Although the exact timeline was undisclosed, it is evident that Bhutan has been mining BTC for at least three years. The reasons why this mining project has not been disclosed to the public, the locals, or where it is located remain unclear. Additionally, it is uncertain whether the project has produced any profits.

For this project, the Bhutanese government has partnered with Bitdeer, a Nasdaq-listed mining company. An investor at the company mentioned that they expect to generate 100 MW out of the 550 MW power supply from Bhutan, where the construction of the mining data center is expected to begin in 2023’s second quarter and complete by 2024’s third quarter. In the past few years, Bhutan has imported computer chips worth $193 million, showing that it has launched an extensive BTC project.

Some believe that the Bhutanese government should disclose their BTC mining project to the locals, while others think that being cautious is the better approach, given the cryptocurrency has a high volatile and risky nature. Former international advisors recommend that Bhutan should be careful with its investment in BTC to avoid environmental burdens.

Why Did Bhutan Start Mining BTC?

The primary reason why Bhutan started mining BTC is its significant hydroelectric power supply generated from local rivers. Jaran Mellerud, an analyst at Luxor, believes that Bhutan’s vast resources make it alluring for miners whose sole job is converting undervalued electricity into BTC. Bhutan produces so much electricity that it exports approximately 75% of its annual power supply to India during the rainy season when the rivers are overflowing.

If BTC’s value rises significantly, Bhutan’s BTC mining project could turn profitable and benefit the region. Moreover, it could give Bhutan an upper hand in the case of global adoption of the cryptocurrency and BTC’s eventual development on the trade scene.

El Salvador’s BTC Mining Project

El Salvador, led by President Nayib Bukele, has also started BTC mining using energy harnessed from its volcanoes. Besides becoming the first country to accept bitcoin as legal tender, El Salvador also designed “Bitcoin City,” an innovative urban project that will use geothermal energy from Conchagua and Tecapa volcanoes to power itself. Recently, the project won an international award for its architecture and interior design.