Bhutan boosts Bitcoin mining ahead of 'halving' event
What's the story
Bhutan's investment division, Druk Holding & Investments (DHI), is partnering with NASDAQ-listed Bitdeer Technologies Group, in a bid to mitigate the potential financial impacts of the impending 'halving' event. The collaboration aims to significantly increase their Bitcoin mining operations. The goal is to enhance Bhutan's mining capacity six times through the use of advanced hardware technology.
Expansion plan
Projected increase in Bhutan's mining capacity
The proposed improvements are expected to raise Bhutan's mining capacity by an extra 500 megawatts (MW) by mid-2025. This will elevate Bhutan's total capacity to 600MW, as stated by Matt Linghui Kong, Bitdeer's chief business officer. The necessary capital for this expansion will be used from a $500 million fund initiated by the pair in May of the previous year, when they revealed intentions to utilize Bhutan's ample hydroelectric power for Bitcoin mining.
Bitcoin dynamics
Understanding Bitcoin mining and the 'halving' event
Bitcoin mining is the process through which transactions are officially entered on the blockchain. Miners use high-powered computers to secure the blockchain and are rewarded with new tokens. These rewards are set to halve every four years, capping the total Bitcoin supply at 21 million coins. Halving in April will reduce mining rewards from 6.25 to 3.125 coins per block, limiting the number of new Bitcoins entering circulation.
Optimistic outlook
Confidence amidst halving event and market challenges
Despite the upcoming reduction in mining rewards, both DHI and Bitdeer are confident about maintaining operational efficiency even if Bitcoin's value drops post-halving. Bitdeer boasts one of the industry's lowest costs per Bitcoin mined at $20,000 per coin, said Kong. This optimism comes after a tough 2022 when some miners went bankrupt due to soaring energy prices and Bitcoin's value falling below $16,000.
Market resurgence
Bitcoin value surge spurs investment in mining capacity
Over the past 12 months, Bitcoin's value has seen a 140% increase, providing relief for surviving companies now investing in hardware enhancements and capacity growth. However, the surge has also led to an increase in Bitcoin's mining difficulties, needing more computing power to add new blocks. Ujjwal Deep Dahal, DHI's CEO, states that the nation's 500MW boost will be built on Bitdeer's latest hardware to reduce costs and improve computing power.