According to the latest statement by the official investment arm of Bhutan, it has plans to raise a fund worth up to $500 million to be used for developing green crypto mining. In this context, we discuss what is green crypto mining, and Bhutan’s plans for green crypto mining from the IAS exam perspective.
Bhutan’s Green Crypto Mining Plans
The fund will be used by the Singapore-based Bitdeer to set up a 100-megawatt operation in Bhutan.
- Bitdeer is owned by a Chinese entrepreneur Jihan Wu. The company is one of the top crypto miners by computer power.
- The construction is slated to start in the second quarter of 2023.
- Interestingly, crypto mining can be the least risky method for the nation looking for crypto opportunities, and for now, the nation will focus on Bitcoin.
Aim and strategy:
- The goal is to set up carbon-free digital mining using Bhutan’s abundant hydroelectric power.
- Bhutan seeks to diversify its economy heavily reliant on hydropower revenues.
- It will look at assets that are low volume, high value, or digital assets.
- Green mining will further support its agenda on ecological and sustainable development goals.
- It also wants to gain from the global headwinds in cryptocurrencies since the pandemic slump is over.
What is Green Crypto Mining?
- Crypto mining requires energy to power the computers that verify and record cryptocurrency transactions.
- Traditionally this energy comes from the burning of coal or fossil fuels, a source of carbon emissions, which are responsible for global warming and climate change.
- On the other hand, green crypto mining draws power from renewable energy sources such as solar power, hydroelectric power, and nuclear energy that emit little or no carbon.
Significance: Bhutan’s entry into the volatile and at times speculative ecosystem of crypto is notable because of the nation’s fame for using a “Gross National Happiness” index to gauge economic success. The GNH includes elements such as psychological well-being and ecological diversity to measure the standard of living.
- Cryptocurrency is a digitized asset spread through multiple computers in a shared network. The decentralized nature of this network shields them from any control from government regulatory bodies.
- The term “cryptocurrency” in itself is derived from the encryption techniques used to secure the network.
As per computer experts, any system that falls under the category of cryptocurrency must meet the following requirements:
- Absence of any centralized authority and is maintained through distributed networks.
- The system maintains records of cryptocurrency units and who owns them.
- The system decides whether new units can be created and in case it does, decides the origin and the ownership terms.
- Ownership of cryptocurrency units can be proved exclusively cryptographically.
- The system allows transactions to be performed in which ownership of the cryptographic units is changed.
Know more about cryptocurrency in the linked article.
Bhutan Plans Fund for Green Crypto Mining [UPSC Current Affairs]:- Download PDF Here
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