Bitcoin Mining in the Middle East
The beginnings of this mining revolution go back to late 2021 when the digital asset arm of Abu Dhabi’s sovereign wealth fund, Zero Two, partnered with local Bitcoin mining company Phoenix Technology.
The momentum continued as earlier this year when Zero Two launched its second Bitcoin mining partnership. This time with the U.S. public miner Marathon Digital.
Today, the UAE’s operational Bitcoin mining capacity, most of which is in Abu Dhabi, is around 400 megawatts, according to Mellerud. This is around 4% of Bitcoin’s global hash rate.
However, he added that its capacity will likely surpass 600 MW by the end of this year as the semi-governmental projects expand.
“At an assumed average energy efficiency of 30 J/TH, bitcoin miners in the UAE should generate about 13 EH/s, corresponding to 3.7% of the Bitcoin hashrate.”
The UAE also has abundant energy resources, as virtually all of the country’s electricity has been generated by natural gas. There is now a shift to nuclear and solar power in the Emirates.
Moreover, the UAE just opened the largest nuclear power plant in the Arab world, with a total capacity of 4 gigawatts. It is set to expand this year. Therefore, the influx of nuclear energy will increase the demand for flexibility.
Energy Shifts and Mining Metrics
The region also has huge solar fields that periodically produce large amounts of excess energy. Furthermore, a lot of energy is wasted through the country’s desalination plants, which could be channeled into mining operations.
The researcher concluded that the future looks bright for BTC miners in the UAE.
“Overall, the UAE will become an increasingly important bitcoin mining country over the next couple of years and could provide a case study for other Middle East countries to follow.”
Mining profitability, or hash price, has increased recently but remains low at $0.077 per terahash per second (TH/s) per day. During its peak at the height of the 2021 bull market, it was $0.40 TH/s/day, according to Hashrate Index.
Furthermore, the network hash rate is also near peak levels at 368 EH/s, the mining analytics platform reported.
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