Having invested in startups for over twenty years, I have deep respect for entrepreneurs trying to build a company. It's very difficult. And most of the time it doesn't work. Of course, developing an entire country is much more difficult. Many developing country leaders don't even try. They use their short time in power for their own benefit. But some leaders do the best they can. Nayib Bukele made bitcoin legal tender in El Salvador in September 2021. Since then, the country has shown remarkable development on many levels.
bitcoin involvement in Bhutan has been rumored for some time. A few weeks ago, we learned that mining operations in Bhutan resulted in a significant bitcoin stack of around 13,000 bitcoin. That's a lot. Bhutan leads the world with a bitcoin stack worth around 30% of its GDP. Per capita, each Bhutanese indirectly owns almost 0.02 bitcoin, at current prices eight times the average monthly income. All bitcoin mining is done with 100% clean and renewable hydroelectric energy. Bhutan is the only country in the world with negative CO2 emissions and at the same time has the largest bitcoin stack relative to its size. This attracts global attention to Bhutan.
After traveling six days through this truly beautiful country, then attending the Bhutan Innovation Forum and meeting so many wonderful people, including Her and Her Majesty, I learned a lot. About Bhutan, mindfulness, its development strategy and the role bitcoin plays. While traveling I saw two bitcoin mining sites, both were quite large.
Congratulating Her Majesty, Queen Ashi Tshering Yangdon, on her bitcoin strategy, he smiled and offered to introduce me to His Majesty, Jigme Khesar Namgyel Wangchuck, the Fifth King. During a fifteen-minute conversation with him, he quickly said, “Hodl, hodl, hodl.” Discovered bitcoin around 2011. Since 2019, Bhutan has been mining bitcoin. In 2008, when His Majesty became leader of Bhutan at the age of 28, and several times thereafter, he clearly stated his mission: “As King, I have committed my life and service to the well-being of our country and our people.” . Majesty has been working hard for sixteen years to do it honestly.
And it is quite a challenge. The economy is in deficit, dollars are scarce, Bhutan is largely dependent on India, its neighbor, which in 1975 made Sikkim, a neighboring kingdom, the sixteenth Indian state. But India is also helping: building roads, hydroelectric plants and delivering almost all of Bhutan's imports. The Indian rupee and the Bhutanese ngultrum are pegged to each other. 70% of Bhutan's economy is based on agriculture, the cost of living compared to the average income is high, many young people are migrating to Australia or Canada in search of better income opportunities. We have heard of domestic violence and alcohol problems, which contradicts the notion that the Bhutanese are the happiest people in the world.
As in El Salvador, bitcoin is not the miracle solution, it is part of a broader plan of innovation and modernization. Her Majesty's biggest initiative is the construction of a new center for entrepreneurs, technology and mindfulness called “Gelephu Mindfulness City”, a multi-million dollar project in southern Bhutan. It involves attracting a lot of foreign investment and talent. The other big initiative is bitcoin. Leveraging Bhutan's greatest strength, cheap and environmentally friendly hydropower, which is also its main export to India, the Kingdom has accumulated at least 13,000 bitcoin, perhaps more. Waiting for significant value appreciation, they are for the most part slacking off. It only sells a little. bitcoin is about wealth creation. With the bitcoin bullrun about to occur, in this cycle Bhutan's bitcoin stack could exceed its GDP and even its external debt. bitcoin's benefits exceed pure value creation: they call bitcoin the energy battery. In winter, when it rains much less and India uses less energy, Bhutan can use bitcoin to import some electricity from India. bitcoin gives Bhutan access to hard currencies like the US dollar or euro. Sell and import more or less everything to and from India. Bhutan is notoriously short of foreign currency.
bitcoin mining builds technical skills. The Bhutanese are capable of operating and repairing mining rigs themselves. Bhutan can easily become a global competition center for clean bitcoin mining. Newly acquired skills can be expanded to other technical areas. For example, Bhutan implemented a digital national ID card on the Polygon blockchain. Using a wallet, Bhutanese have access to many government services. About 20% of Bhutanese have joined it. Knowledge about bitcoin and IT in general can be the basis for attracting investors and foreign technology startups. Strategically, bitcoin creates some independence from its strong and still benevolent neighbor India. China is not a big problem for Bhutan.
His Majesty builds the bitcoin strategy on Bhutan's few but distinctive assets, such as cheap energy, very good English skills, a world-leading image of mindfulness and harmony with nature, and the ability to not only preserve its rich cultural traditions and history. Its goal is to improve the happiness of its people, including, but not limited to, their standard of living. Clearly, bitcoin can be the key element and driver of Bhutan's future.
When talking about bitcoin with Bhutanese government officials, we felt a bit shy, which makes a lot of sense. Bitcoiners don't brag about it. Bhutan still needs a lot of help from developed countries and international organizations. At the conference I heard the phrase “I tried to get him to sell, but he refused.” “Hodl, hodl, hodl,” is what His Majesty told me. Without a doubt, bitcoin is generating significant benefits for Bhutanese people in addition to value creation.
At 44, after 16 years in power, His Majesty seems to have the long-term vision to develop this beautiful country in the Himalayan mountains and plenty of time to implement it. As we can see around the world, it is an incredible job. bitcoin, clearly, is significantly improving the odds for Bhutan.
This is a guest post by Alex v. frankenberg. The opinions expressed are entirely their own and do not necessarily reflect those of btc Inc or bitcoin Magazine.
