Bitcoin mining companies have been looking for a suitable region to call home ever since they were forced to leave China.
Many of them are now eyeing the United Arab Emirates as a potential location to set up shop in, as the country started emerging as the crypto mining hub in the Middle East.
Some major mining companies have already signed agreements and entered partnerships with the digital asset arm of a sovereign wealth fund from Abu Dhabi.
The fund, known as Zero Two, partnered with a native Bitcoin mining company Phoenix Technology in 2021. The move started a Bitcoin mining revolution in the region.
While mining companies were slow to approach, they are developing a strong interest in operating in the area.
The momentum kickstarted by Zero Two and Phoenix Technology’s partnership was continued earlier in 2023, when the fund entered its second partnership.
This time, it teamed up with a US mining company, Marathon Digital.
As of early July 2023, the UAE’s operational Bitcoin mining capacity is approximately 4% of Bitcoin’s global hashrate.
This translates to around 400 megawatts, according to Bitcoin mining expert Jaran Mellerud.
He noted that at an assumed average energy efficiency of 30 J/TH, BTC miners in the UAE should generate approximately 13 EH/s. This represents 4% of the total Bitcoin hashrate.
UAE has an abundance of energy useful to the miners
Apart from being crypto-friendly, unlike China, the UAE can also offer abundant energy resources.
All of the country’s electricity is generated by natural gas, but the nation is making a shift toward nuclear and solar power.
The UAE just opened the largest nuclear power plant in the region, with a total capacity of 4 gigawatts.
Furthermore, it is set to expand this year, so the influx of nuclear energy will boost the demand for flexibility.
The country is also perfectly positioned to benefit from solar power. The region features massive solar fields that produce large amounts of additional energy, periodically.
A lot of their energy is wasted via the desalination plants. This wasted power can be put to a better purpose by directing it toward Bitcoin mining companies.
The UAE will become the major mining nation over the next few years
The researcher concluded that Bitcoin miners could have a future in the UAE.
With that in mind, it is likely that they will continue to approach the country and enter into new partnerships and collaborations with the fund, and the local authorities.
Mellerud believes the UAE will become a major Bitcoin mining nation in several years. More than that, it could be an example for neighboring countries.
At the moment, mining profitability remains low, despite seeing an increase recently.
At this time, miners earn $0.077 per terahash per second (TH/s) each day. At its peak, it was at $0.40 TH/s/day in 2021, when the industry was at the height of the bull market.
Read the full article here
