Located in the Himalayas, Bhutan, known for its focus on gross national happiness, is making a bold bet in the world of cryptocurrencies. The country is rapidly bitcoin–btc-mining-in-himalayas-as-halving-looms?utm_source=google&utm_medium=bd&cmpId=google” target=”_blank” rel=”noopener nofollow”>expanding your bitcoin mining capabilities in anticipation of the upcoming halving, an event programmed into the bitcoin code that halves the number of new coins awarded to miners.
This strategic move comes after Bhutan's economy, which relies heavily on tourism, was hit hard by the coronavirus pandemic. With foreign exchange reserves dwindling and unemployment rising, the government is looking at bitcoin mining as a potential source of income.
bitcoin-mining-plan-in-motion-to-power-up-economy” rel=”nofollow noopener” target=”_blank”>Bhutan's foray into cryptocurrencies Mining began in 2023. Now, the kingdom is partnering with Bitdeer Technologies Group, a Nasdaq-listed company, to significantly increase its mining capacity. By 2025, this collaboration aims to triple Bhutan's current capacities, raising its total mining power to a staggering 600 megawatts, an increase of 500 megawatts.
bitcoin Halving Spurs Mining Expansion
The driving force behind this expansion is the upcoming bitcoin halving, scheduled for April 2024. This quadrennial event directly impacts the profitability of miners. By reducing the number of new Bitcoins awarded per block mined, the halving essentially halves miners' potential income. Bhutan's strategy is to counteract this decline by significantly increasing its extraction volume.
This approach reflects a global trend. Data from Coin Metrics reveals a staggering 60% increase in global bitcoin mining power consumption this year, possibly reflecting miners around the world looking to hedge against the impact of the halving.
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BTCUSD trading at $66,897 on the 24-hour chart: TradingView.com
Challenges for bitcoin betting in Bhutan
However, Bhutan's path is not without challenges. While the country has a clean energy advantage, relying heavily on hydropower for mining, the environmental implications of such a large-scale operation have yet to be fully assessed. Experts warn that the energy demands of this effort could affect Bhutan's hydroelectric capacity, which could affect the supply available to the population.
Bitdeer's new bitcoin mining facility in Bhutan. Image: Shutterstock
Furthermore, the success of Bhutan's bet largely depends on the price of bitcoin. If the price does not increase significantly after the halving to compensate for the reduced rewards, miners, including those in Bhutan, could face financial difficulties. The cryptocurrency market is notoriously volatile and a drop in prices could significantly impact Bhutan's return on investment.
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Bhutan's decision to enter the crypto The mining sector marks a significant change for the nation. While the potential economic benefits are undeniable, the long-term sustainability and profitability of this venture remains to be seen.
The next few months will be crucial as the world watches this unique experiment unfold high in the Himalayas. Bhutan's bet could pave the way for other developing nations to explore cryptocurrency mining as a source of income, but issues related to environmental impact and market dependence will need to be addressed for this strategy to be truly sustainable.
