The Rise of Bhutan’s Bitcoin Mining Operation on its Failed ‘Education City’

Bhutan’s Bitcoin Mining, the remote and bio-diverse kingdom nestled in the Himalayas, has quietly made its mark in the world of cryptocurrency. Under the leadership of King Jigme Khesar Namgyel Wangchuck, Bhutan has transformed into a crypto Shangri-La, dedicating resources to building its own Bitcoin mining operation. This move comes as the country seeks to avert an economic crisis and address issues such as rising youth unemployment and emigration. In this article, we will explore the fascinating story of how Bhutan built a Bitcoin mine on the site of its failed ‘Education City’ project.

The Rise of Bhutan’s Bitcoin Mining Operation

Bhutan’s foray into Bitcoin mining has largely remained a secret, with government officials keeping the location and scale of the facilities under wraps. However, Forbes recently conducted an investigation using satellite imagery and insider sources to uncover the hidden sites. These sites include four state-owned mines, strategically located across Bhutan.

One of these sites is believed to be the pilot location for Bhutan’s Bitcoin mining efforts. It is situated near Dochula Pass, an area of cultural and political significance that houses 108 memorial shrines dedicated to fallen Bhutanese soldiers. Satellite imagery reveals the presence of green and white-roofed mining units concealed by miles of forest. The site is cleverly hidden from passersby, despite its proximity to a busy highway.

Another mine is located near Trongsa, the ancestral seat of the Wangchuck dynasty, while a third is situated in the heavily forested district of Dagana. The largest mine, however, occupies the site of the failed $1 billion government project called ‘Education City.’ This mine runs alongside Bhutan’s first paved road, but its presence is concealed by mountainous terrain. The only visible signs of its existence are transformers and power lines. The construction of this mine coincided with the import of $193 million worth of processing units, according to customs data.

The Dream of Education City

To understand the significance of Bhutan’s Bitcoin mining operation on the site of ‘Education City,’ we must delve into the history of this ambitious project. ‘Education City’ was envisioned as a world-class regional hub for health, education, finance, and ICT services. The aim was to create a green and sustainable economy while promoting Bhutan as a knowledgeable society. The project, spanning 1,000 acres, was expected to host prestigious universities, R&D facilities, hotels, and event centers.

However, ‘Education City’ faced numerous challenges, including political scandals, mismanagement, and delays. It failed to live up to its promises and was eventually abandoned in 2014. Despite its failure, the project left behind infrastructure such as roads, bridges, and power lines that would later become crucial for Bhutan’s Bitcoin mining endeavors.

Bhutan’s Crypto Investments and Bitcoin Mining

Bhutan’s interest in Bitcoin mining emerged as the country sought alternative sources of revenue amidst declining tourism and rising youth unemployment. The COVID-19 pandemic dealt a severe blow to Bhutan’s tourism industry, which was a significant source of income. In response, Bhutan’s government began exploring opportunities in the crypto space, eventually establishing a sovereign Bitcoin mine.

The sovereign investing arm of Bhutan, Druk Holdings & Investment (DHI), confirmed the existence of the mines. However, they did not disclose the exact locations, citing commercial sensitivity. DHI emphasized that the selection of mining sites was based on logistical needs, such as power supply. Bhutan, known for its surplus of hydropower, prioritizes power supply for domestic consumption, with industry and business, including Bitcoin mining, receiving lower priority.

Bhutan’s crypto investments ramped up in 2020, with the country engaging in talks with Bitcoin miners and suppliers. The exact timing and scale of these investments remain undisclosed. However, trade data indicates that Bhutan imported over $220 million worth of chips used for Bitcoin mining between 2021 and 2022. The country also experienced a significant spike in power usage by industry, reflecting the growing demand from mining operations.

Challenges and Future Prospects

While Bhutan’s Bitcoin mining operations remain largely undisclosed, they have not escaped the attention of insiders and experts in the crypto industry. Forbes’ investigation has shed light on these secret facilities, making them an open secret among the Bhutanese people. However, the government and DHI have maintained their silence on the scope and financing of the crypto regime.

Bhutan’s Bitcoin mining activities provide an opportunity for economic growth and job creation. The partnership with Singaporean Bitcoin mining giant Bitdeer further solidifies Bhutan’s position in the crypto industry. The establishment of a 600 MW facility in Gedu is expected to support 300 to 400 jobs and create a new computing sector in Bhutan. This venture aligns with Bhutan’s aspirations for a green and sustainable economy, echoing the original vision of ‘Education City.’

As Bhutan continues its journey into the world of cryptocurrency, it faces challenges such as economic reforms and budget cuts to avoid a financial crisis. The Asian Development Bank has forecasted a slowdown in Bhutan’s economy, making the success of the Bitcoin mining operations crucial. The future of Bhutan’s crypto investments remains uncertain, but for now, the country’s appetite for blockchain-based solutions seems undimmed.

In conclusion, Bhutan’s transformation into a crypto Shangri-La through the establishment of a Bitcoin mining operation on the site of its failed ‘Education City’ project is a testament to the country’s adaptability and resilience. The hidden mining facilities, powered by Bhutan’s surplus hydropower, hold the promise of economic growth and job creation. As Bhutan explores new avenues in the crypto space, the world watches with anticipation to see how this Himalayan kingdom embraces the opportunities presented by Bitcoin mining.