The kingdom of Bhutan has been quietly mining Bitcoin for years

From the article:

Sources familiar with Bhutan’s efforts to develop sovereign mining operations told Forbes that discussions have been occurring since 2020, though until this week its government had never disclosed its plans. Bhutan sought to harness the country’s hydroelectric plants to power racks of mining machines that solve complex mathematical problems in order to earn bitcoin rewards. Once completed, this would make Bhutan one of the only countries to run a state-owned mine, alongside El Salvador.

On Saturday, days after Forbes contacted Bhutanese officials with questions about the mining scheme, a government representative confirmed to local newspaper The Bhutanese that it had begun mining “a few years ago as one of the early entrants when the price of Bitcoin was around USD 5,000.” It explained that the earnings go towards subsidizing power and hardware costs.

Bhutan’s Ministry of Finance did not respond to a list of questions from Forbes about the scope of the enterprise. It’s unclear when mining began, where it’s located and whether the scheme has turned a profit. (As for the start date, bitcoin was valued at $5,000 in April 2019.) It’s also unclear why Bhutan never disclosed the project to its citizens or international partners.

[…]

Last year, around $142 million worth of computer chips were imported into Bhutan, accounting for around a tenth of the kingdom’s total $1.4 billion of inbound trade, or around 15% of the government’s $930 million annual budget. The country also imported $51 million of chips in 2021. By comparison, Bhutan custom officials recorded just $1.1 million of these chips were imported in 2020. The cost of bitcoin mining rigs tracks the cryptocurrency’s value as it swings, but industry insiders say even at 2021’s sky-high prices, this level of spending would equate to a data center the size of several football fields.

[…]

Sources familiar with the matter told Forbes that the pandemic was a trigger for senior Bhutan officials to begin talks with bitcoin miners, and mining suppliers. Bhutan, which was closed to foreigners until 1974, again sealed its borders for almost two years to shelter its population of 800,000 from Covid-19. (The country famously staved off the virus for months until its first case was reported in an American tourist in January 2021, which prompted the lockdown.) The country has claimed only 21 Covid-19 deaths to date, but the pandemic devastated its tourism industry, which is core to its economy.

[…]

Analysts have also voiced concerns about Bhutan’s suitability for large-scale mining operations. While Bhutan exports roughly 75% of the electricity generated in its country to India annually, its rivers dwindle in the winter dry season and it actually imports energy back from its giant neighbor.

During those periods, miners stand to lose substantial amounts, according to Alex de Vries, an economics researcher at Vrije Universiteit Amsterdam and the author of Digiconomist. “If you shut down for extended periods of time you risk not even being able to recoup your investment. Not running means no income.”

Not running all the time means getting less out of each computer they import. Still, it’s green energy and overall probably has less environmental impact than tourism. Better them than some other Bitcoin miners, I suppose?

On the other hand, couldn’t India put the electricity to better use? There’s a quote saying it’s “stranded” hydropower which usually means transmission is limited by power line capacity.