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Edited by Niti998 at 21-12-2023 11:58 AM
Bhutan is one of the world's most isolated countries. Hidden behind the slopes of the Himalayas, dozens of containers house Bitcoin mining machines worth millions of dollars, accumulating cryptocurrency ceaselessly. These currencies have become the new focus of Bhutan's monarch and his kingdom. Under the rule of Jigme Khesar Namgyel Wangchuck, Bhutan has quietly transformed into a Shangri-La for cryptocurrencies. The government is investing heavily in mining operations, pouring land, funds, and energy into it, hoping to avert an imminent economic crisis.
Officials in Bhutan have never revealed the locations or scope of these facilities. About four years ago, when Bhutan became the first country to establish a sovereign Bitcoin mining field, few outside Bhutan knew about it. Earlier this year, Forbes reported detailed information about its multi-million dollar investment portfolio, prompting the government to begin disclosing its digital asset investments. These revelations occurred as cryptocurrency institutions collapsed one after another.
Forbes, relying on Bhutan's cryptocurrency investments and satellite images from Planet Labs, Satellite Vu, and Google Earth, identified the locations of four mining sites operating in Bhutan. The images showed long rectangular mining units, data center cooling systems, and high-capacity power lines and transformers connecting to the site from Bhutan's hydroelectric power plant.
One of the facilities, the location where Bitcoin mining in Bhutan is conducted, is built near Dochula Pass, an area with cultural and spiritual significance, housing a memorial temple for 108 fallen Bhutanese soldiers. Satellite images from Planet Labs and Google Earth show that the earthworks at this location began in 2020 and appear to have been completed by the end of 2022. Aerial views reveal mining units with green and white roofs surrounded by miles of forest. Although just steps away from a busy highway, Google Street View indicates that it is entirely concealed from unsuspecting passersby. The ground of the road has been leveled to provide additional concealment for the site.
The second mining site is near Thimphu, a town east of Dochula, and the third is in a densely forested area near Dagana, close to a high school serving rural community children.
The country's fourth and largest mine is located on the foundation of a controversial and failed government project, the ""Education City,"" which cost $1 billion and aimed to establish an international ""education and knowledge"" center in Bhutan. The mine is built along Bhutan's first paved road, the Pemaling-Thimphu National Highway, but hidden in the mountains. Transformers and power lines expose the reality of the Bitcoin mining field. According to U.S. Customs data, historical satellite images show that construction began around December 2021, importing ""processing equipment"" worth $193 million. The tariff codes for these imported products match those of Bitcoin mining hardware companies.
Bhutan's economic data has always been poor, with a minimum wage of only $45 per month, and about 12% of the population living below the poverty line. The country's finances have long relied on tourism income and exporting excess hydroelectric power to neighboring India. However, the COVID-19 pandemic significantly reduced the country's annual income from the $65 per day visa fee, requiring urgent adjustments.
In 2009, the Bhutanese government paid about $9 million to the consulting firm McKinsey to help design and build a $1 billion ""world-class medical, education, financial, information communication technology service regional center."" This 1,000-acre campus is located at the confluence of two rivers and was to become a beacon for Bhutan's experimental Gross National Happiness Index economic model, as well as a center for higher education in Asia. It was supposed to host satellites from some of the world's most prestigious universities, along with research facilities, laboratories, hotels, and event centers. According to the Bhutanese government, its goal was to promote the ""Bhutanese brand"" and create a ""green and sustainable economy,"" ""culturally and spiritually sensitive industries,"" and a ""knowledge society."" However, plagued by scandals, mismanagement, and numerous delays, Education City was abandoned in 2014. What remained were roads, bridges, water supply systems, and most importantly, power lines that became the cornerstone of Bitcoin mining fields.
Bhutanese officials began talks with Bitcoin miners and suppliers, most notably with the Saudi sovereign investment entity Druk Holdings & Investment (DHI), around 2020. Bhutan ""entered the mining field"" when the price of cryptocurrency was $5,000 (last valuation in April 2019 but now valued at $36,000). Bhutan's own import data and satellite images indicate an increase in its operations in 2020. In May, a spokesperson for the fund only mentioned that there had been ""a series of Bitcoin investments for some time."" They added that DHI ""currently holds a net positive value in our digital assets."" The price of Bitcoin plummeted from $69,000 in November 2021 to below $17,000 in December of that year.
In 2022, the country partnered with the Singapore-based Bitcoin mining giant Bitdeer, making Bhutan its location for Asian expansion. According to satellite images from Planet Labs, Bitdeer broke ground on a mine in the southern town of Gedu in March, reaching a power output of 100 megawatts in August. The facility will be powered by DHI, which owns the Bhutanese National Power Corporation. In an update in July, Bitdeer revealed that it was operating 11,000 mining machines and had ordered an additional 15,000 machines. Upon completion, the 600-megawatt facility is expected to consume more energy than other regions in the country, as reported by Nikkei.
Recently, Bitdeer employees have been engaging with investors at industry conferences such as Mining Disrupt, seeking a $500 million ""green crypto mining"" fund. DHI estimates that it will provide Bhutan with 300 to 400 jobs and a new computing department, aligning with the country's abandoned Education City plan.
The Asian Development Bank predicts that Bhutan's economic growth rate will slow to 4.6% this year, making it urgently in need of new funds and employment opportunities. The government's own economists are calling for economic reforms and budget cuts to avoid a financial crisis.
Currently, Bhutan's interest in blockchain-based solutions seems unabated. Earlier this month, on the 12th anniversary of the king and queen's marriage, the country launched an experimental decentralized digital identity application. Its first test subject and digital citizen are the Crown Prince. |
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Post time 1-12-2023 09:40:06