The kingdom of Bhutan – a landlocked country located in the eastern Himalayas – has reportedly used its renewable energy sources to power its bitcoin mining operation for years. A government representative said that the process began when BTC was worth around $5,000. It should be noted that the primary cryptocurrency reached this level for the first time in October 2017.
Another country that has done so is El Salvador. The Latin American country, which became the first to legally tender Bitcoin within its borders, has begun mining BTC with energy derived from volcanoes.
Secret Bitcoin forays into Bhutan
according to coverage By Forbes, the Himalayan country is using its vast hydroelectric resources to create a state-owned Bitcoin mine without disclosing it to the public. However, a government representative supposedly said that the nation began mining bitcoin “a few years ago as one of the first comers when bitcoin was around $5,000.”
Although the exact timeline of when the nation jumped on the bandwagon has not been revealed, one can offer some suggestions. The price of the leading digital asset reached $5,000 for the first time in October 2017 and stayed above it until November 2018, when it fell below $4,000. BTC regained this level in April 2019 and briefly fell below this level during the COVID-19 pandemic.
As such, it is safe to assume that the Bhutan government has been involved in BTC mining for at least three years.
It remains unclear why lawmakers did not disclose the community’s forays at large, the location of the mine, or whether it generated profits.
The report further revealed that the Bhutanese government has partnered with Nasdaq-listed mining company Bitdeer. An investor in the company sheds more light on the collaboration:
“We expect to generate 100 MW of the 550 MW power supply from Bhutan, with construction of the mining data center expected to start in the second quarter of 2023 and be completed in the third quarter of 2024.”
Another factor that shows that the Asian nation has launched this BTC project is its massive purchase of computer chips. Forbes claimed to have imported $193 million worth of such items in the past few years.
Some believe it is time for the Bhutanese government to reveal its efforts to the local population. Others, such as the former international consultant, who has not been named, believe that the country should be careful just because of the risky nature of cryptocurrencies, and more specifically, bitcoin:
“It is alarming that Bhutan’s resources have been invested in a clandestine manner in a highly volatile and risky investment with a significant environmental burden.”
Why mine bitcoin?
One of the main reasons behind the BTC mining project could be the vast resources that the country has and the hydroelectric capacity generated from the many local rivers. Jaran Millrod, the Luxor-based analyst, supports this thesis:
“It is not surprising that entities are mining bitcoins in Bhutan. The mountainous country has enormous hydroelectric potential for its small population and produces a similar amount of electricity per capita as the United States – a richer country. This cheap, reserved hydropower is undoubtedly alluring to workers Miners whose sole job is to convert undervalued electricity into Bitcoin.”
In fact, Bhutan produces so much electricity that it exports about 75% of the amount it generates annually to its western neighbor – India – during the rainy season when the rivers overflow.
BTC mining may become profitable for the country if the price of the asset increases in years and benefits the region. The move could also give Bhutan an upper hand in the event of global adoption of the cryptocurrency and its eventual development on the commercial scene.
El Salvador is another example
Speaking about the relationship between bitcoin and countries, one should mention El Salvador. The Central American country, led by President Najib Bukele, adopted the asset as legal tender in 2021 and announced plans to mine bitcoin using energy extracted from local volcanoes.
It has also designed a high-tech city called “Bitcoin City,” which will employ the underlying digital asset as the official currency. It will be located near the Conchagua and Tecapa volcanoes and will use their geothermal energy to power themselves.
The future urban project recently had won International award for architecture and interior design.
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