The Kingdom Of Bhutan Has Been Quietly Mining Bitcoin For Years

The Himalayan kingdom confirmed it has been running a bitcoin mining operation as mystery surrounds the scale of its earlier cryptocurrency investments. From a report: Beneath the Himalayas, rivers fed by ancient glaciers supply the tiny kingdom of Bhutan with immense stores of hydroelectricity. The renewable resource has become an economic engine, accounting for 30% of the country’s gross domestic product, and fueling the homes of nearly all of its 800,000 residents. But for the past few years, Bhutan’s royal government has been quietly devising a new use for these reserves: powering its very own bitcoin mine. Sources familiar with Bhutan’s efforts to develop sovereign mining operations told Forbes that discussions have been occurring since 2020, though until this week its government had never disclosed its plans.

Bhutan sought to harness the country’s hydroelectric plants to power racks of mining machines that solve complex mathematical problems in order to earn bitcoin rewards. Once completed, this would make Bhutan one of the only countries to run a state-owned mine, alongside El Salvador. On Saturday, days after Forbes contacted Bhutanese officials with questions about the mining scheme, a government representative confirmed to local newspaper The Bhutanese that it had begun mining “a few years ago as one of the early entrants when the price of Bitcoin was around USD 5,000.”

It explained that the earnings go towards subsidizing power and hardware costs. Bhutan’s Ministry of Finance did not respond to a list of questions from Forbes about the scope of the enterprise. It’s unclear when mining began, where it’s located and whether the scheme has turned a profit. (As for the start date, bitcoin was valued at $5,000 in April 2019.) It’s also unclear why Bhutan never disclosed the project to its citizens or international partners.