By
Godfrey Benjamin
April 29th, 2024
Bhutan is ramping up Bitcoin mining operations in partnership with Nasdaq-listed Bitdeer Technologies to offset revenue decrease due to an upcoming halving, which will cut Bitcoin mining rewards in half.
Bhutan, a small nation nestled in the Himalayas, renowned for stunning mountain landscapes, is making a big bet on Bitcoin. As Bitcoin’s next “halving” approaches, reducing mining rewards, Bhutan plans a substantial upgrade to its Bitcoin mining capabilities. With this strategic move, it aims to become a major player in the global mining scene.
Druk Holding & Investments (DHI), Bhutan’s government investment firm, has partnered with Bitdeer Technologies Group, a major crypto mining company listed on Nasdaq. With this strategic partnership, Bhutan uses abundant hydropower resources, a clean and renewable energy source ideal for Bitcoin mining operations.
The planned upgrades show Bhutan’s ambitious vision for Bitcoin mining operations. By the first six months of 2025, Bhutan anticipates a substantial 500-megawatt surge in its Bitcoin mining capacity, elevating the nation’s total capacity to a formidable 600 megawatts – a remarkable milestone.
“will be built on Bitdeer’s latest hardware to lower costs and improve computing power,” said Ujjwal Deep Dahal, CEO of DHI. This focus on cutting-edge technology underlines Bhutan’s commitment to efficiency and sustainability in its mining operations.
Bhutan Gears Up for Sustainable Bitcoin Mining
The upcoming Bitcoin halving event scheduled for April 2024 casts a long shadow. The halving mechanism reduces Bitcoin miners’ block rewards by 50%, potentially affecting their profitability. However, DHI and Bitdeer express assurance in their capability to steer this challenge successfully.
Matt Linghui Kong, Chief Business Officer at Bitdeer, said they expect to close the fundraising by July. This $500 million fund, initiated in May 2023, underscores Bitdeer’s dedication to long-term investment in Bhutan’s mining infrastructure. Notably, Bitdeer’s operational costs for mining each Bitcoin are among the industry’s lowest, approximately $20,000 per coin.
The 2022 crypto crash serves as a stark reminder of the industry’s volatility. Soaring energy expenses and plunging Bitcoin values forced several miners into bankruptcy. However, Bitcoin’s recent 140% surge reignited optimism, prompting miners to invest in hardware upgrades and capacity expansions. Bhutan’s ambitious venture exemplifies this renewed confidence.
Bitcoin Mining Challenges Amid Rising Costs
Despite the positive outlook, there are still challenges in Bitcoin mining operations. The increasing Bitcoin’s mining difficulty, a measure of the computational power needed to validate transactions, is driving up computing costs for miners. This trend could offset some of the gains from the recent price rally.
Bhutan’s entry into Bitcoin mining signifies more than just economic benefits. The DHI views blockchain technology as a vital foundation for establishing an “innovation ecosystem for a startup economy”.
As Bitcoin’s halving captivates global attention, Bhutan aims to capitalize on its renewable hydropower capabilities. Poised with eco-friendly resources, Bhutan’s strategic move optimizing efficiency to become a key player within the international mining arena.