According to the latest by Hashrate Index, a website for Bitcoin mining data and metrics, the UAE is now becoming a growing destination for Bitcoin miners, especially in the Middle East.
Bitcoin Miners Look For Greener Pastures
Bitcoin miners have faced issues in popular Bitcoin mining countries like China and Kazakhstan in recent years. As a result, many of these miners have been forced to look for new operational hubs.
Mining Bitcoin is a difficult process, both financially and in terms of the amount of electricity required. It involves using powerful computers to solve complex math problems in order to get rewarded with BTC. This energy requirement is part of the reason why miners have run into problems in various jurisdictions over the years.
However, the Middle East is now emerging as a prime destination for Bitcoin miners, and the UAE is leading the charge among these energy-rich countries. The United Arab Emirates is helping to pave the path for the future of Bitcoin mining with its increased availability of affordable electricity, favorable access to funding, and politically stable and business-friendly climate.
During the past year-and-a-half, some major mining companies signed agreements and entered partnerships with the digital asset arm of Abu Dhabi’s sovereign wealth fund (Zero Two) to create two giga projects that put the UAE on the global bitcoin mining map. As a result, the biggest amount was spent on a single Bitcoin mining site, with an investment totaling $2 billion.
Now, it seems these large-scale projects are starting to cement the UAE as a serious player in the Bitcoin mining niche. According to the data provided by the Hashrate Index, bitcoin miners in the UAE should produce approximately 13 EH/s, which is equivalent to 3.7% of the total Bitcoin hash rate at an assumed average energy efficiency of 30 J/TH.
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UAE Aims To Become A Global Crypto Hub
The UAE government aims to establish the country as a global hub for cryptocurrency and blockchain innovation. Several recent initiatives show the country is serious about becoming a leader in this emerging industry. With government backing, relaxed rules, and major companies setting up offices, the building blocks are in place.
Earlier this year, the country announced that it is launching a ‘free zone’ for crypto firms called the RAK Digital Assets Oasis (RAK DAO), allowing them to own 100% of their companies.
The future looks bright for Bitcoin mining in the UAE. The country’s share in the global Bitcoin mining metric should continue to grow as more mining firms are drawn to the region. However, considering the hot climate of the region when compared to big Bitcoin mining regions like Texas and Russia, the temperature could be challenging for mining.
Also, the report shows that the only way to mine Bitcoin in a scalable and legally sustainable way in the country is by partnering with a government entity.