Dennis Porter recently reposted an article from The Wall Street Journal on X, stating that Bhutan began mining Bitcoin in 2020 and has become the world's third-largest Bitcoin reserve country five years later, with reserves worth about $1.3 billion, accounting for 40% of its GDP.
In a June 27 post on X, Dennis Porter referred to Bhutan's cryptocurrency journey as a 'milestone' and pointed out the country's strategy of mining through hydropower and its long-term vision for digital assets.
Main Reasons for Bhutan's Adoption of Bitcoin Mining
The concept of Bitcoin mining originated from the initial idea of the King of Bhutan, Jigme Khesar Namgyel Wangchuck, who hoped to boost the economy through technology, which led him to decide to establish a national Bitcoin reserve.
It has proven to be a wise choice for the King of Bhutan from multiple perspectives. At the same time, thanks to Bhutan's abundant river resources, the country can obtain cheap electricity, making it an ideal place for cryptocurrency mining.
Although the initial conditions were rudimentary, Bhutan eventually overcame numerous difficulties and achieved rapid development, having built four state-owned mining sites by 2022. Meanwhile, with the soaring price of Bitcoin, Bhutan not only successfully offset the decline in hydropower export revenue but also used the growth of Bitcoin reserves to fund salary increases for civil servants.
Most mining projects are kept confidential
It is noteworthy that most of Bhutan's Bitcoin mining projects are kept confidential, and citizens only recently became aware of their existence. However, government officials claim that this confidentiality is for strategic reasons to ensure the efficient operation of the mining sites. Project leader Ujjwal Deep Dahal has stated that once the mining machines are operational, they do not want to waste a single day of mining time.
To ensure the efficient and stable operation of mining sites, the Bhutanese government has also established 'Green Digital' and collaborated with Singapore's Bitdeer Technologies. The latter has not only built two new mining sites in Bhutan but also paid for electricity at the mining sites in dollars, thereby increasing Bhutan's foreign exchange reserves.
Currently, Bhutan has at least six mining sites in operation. Although a lack of transparency has raised some concerns among officials, many Bhutanese have realized the economic diversification benefits brought by the project.
Integration of Bitcoin Reserves and Ecological Applications
Looking ahead, Bhutan plans to hold its Bitcoin reserves for the long term and the government no longer intends to establish new mining sites, but rather to upgrade existing facilities. More importantly, Bhutan has begun exploring the practicality of cryptocurrencies in daily life.
It is worth noting that the country has also launched a payment system for tourists, supporting the use of over 100 cryptocurrencies to pay for flights, hotels, and visa fees. Meanwhile, cryptocurrencies will also play an important role in the newly established special administrative region of Gelephu Mindfulness City.
Porter noted that Bhutan now has the world's third-largest Bitcoin reserve. Despite facing risks, Bhutan decisively laid out its plans and quietly became an important player in the global cryptocurrency market. Today, Bhutan's Bitcoin reserves not only signify the country's entry into the accumulation phase of digital assets but also reflect this small nation’s emergence and firm belief in the digital age.
Conclusion:
In summary, Bhutan's decision regarding Bitcoin mining demonstrates the potential of small countries to utilize unique natural resources to achieve economic transformation. Relying on its abundant clean hydropower resources, the country has not only created new sources of income for itself but has also secured a place in the global digital economy.
Although this strategy still faces challenges such as market volatility and public transparency, Bhutan fundamentally reveals how small countries can achieve economic diversification through innovation. In the future, Bhutan's experience may inspire other nations to explore suitable digital paths in their economic transformation.