Bhutan Plans to Boost Bitcoin Mining Capacity Ahead of Halving

Technology

Bhutan Plans to Boost Bitcoin Mining Capacity Ahead of Halving – Crypto News

Published

2 years ago

April 5, 2024

Dripp

Bhutan has paced up its Bitcoin mining capacity ahead of the anticipated halving. According to Bloomberg, Bitdeer Technologies Group and Bhutan’s investment arm intend to increase their Bitcoin mining operations to partially offset the revenue impact of an impending occurrence known as the halving.

Bhutan to Triple its Bitcoin Mining Capacity

Druk Holding & Investments and Bitdeer, a crypto mining company listed on the Nasdaq, have partnered to provide state-of-the-art technology to triple Bhutan’s mining capacity.

By the first half of 2025, the proposed enhancements will double the Himalayan kingdom’s mining capacity by 500 megawatts, according to an interview with Bitdeer’s chief business officer, Matt Linghui Kong. Bhutan would then have 600 megawatts of capacity overall.

Bhutan’s Jump Towards Bitcoin Mining

Bhutan had decided to officially jump on the bandwagon of Bitcoin mining back in 2023. The nation at that time was still getting over the COVID-19 pandemic, which caused the economy to contract by 10% in 2020. This is why the government was moving into the famously unstable and contentious field of cryptocurrency mining.

Foreign exchange reserves of the country had decreased, nonperforming loans in the travel and manufacturing industries surged, and the percentage of young people unemployed reached 29% that time.

Bitcoin Mining Paces up Before Halving

Ahead of a code upgrade that could jeopardize revenue streams, Bitcoin miners are back in survival mode following a near-death experience during the most recent crypto winter. Their energy use has never been higher.

According to Coin Metrics analysis, the amount of electricity used for cryptocurrency mining reached a record 19.6 gigawatts this month, up from 12.1 gigawatts in 2023. According to a calculation made by CoinGape, the number represents an increase of over 61%.

The quadrennial procedure of halving the amount of freshly created coins is known as “halving” in the context of cryptocurrencies. Consequently, half of the block incentives for miners are lost. In general, the halving of bitcoins aids in controlling supply and demand, perhaps raising the value of a bitcoin due to its scarcity.

Generally, Bitcoin halving creates a demand-supply connection, which increases the importance of mining Bitcoin consistently. In that case, there can be a surge in the hash rate following the halving due to the continued demand for Bitcoin. Investors are also more likely to pay exorbitant amounts for a small portion of asset exposure when the original coin is scarce.