Forbes reveals the locations of Bhutan’s bitcoin farms

The kingdom of Bhutan has become a crypto Shangri-La thanks to the authorities allocating land, financing and energy for Bitcoin mining. Journalists Forbes shared the results of their investigation.

The government of King Jigme Khesar Namgyel Wangchuck hopes that digital gold will help address the looming economic crisis.

The project had been kept secret for four years. It only came to light after mentions of the sovereign wealth fund Druk Holding & Investments (DHI) with assets of $2.9 billion as a client of the bankrupt BlockFi and Celsius.

Covert Mining

One of the mining facilities was erected not far from the Dochula Pass — a region of cultural and political significance thanks to its 108 memorial shrines honouring fallen soldiers. Its construction was completed at the end of 2022.

Airborne photographs show a cluster of structures amid kilometres of forest. Despite the proximity of a busy highway nearby, the data centre is entirely hidden from unsuspecting passers-by.

The second location is not far from the town of Trongsa.

The third is in the densely forested Dagana district near a high school that serves children from the rural community.

Fourth and largest, the farm’s location sits on a site allocated for the unbuilt megaproject Education City — a $1 billion attempt to create an international hub of “education and knowledge” in Bhutan.

The site sits next to the country’s first paved road, but is hidden behind rugged terrain. Only transformers and power lines reveal that a Bitcoin mine now operates on this site.

Construction began around December 2021, coinciding with the import of ASIC equipment worth $193 million, according to customs data.

Education City’s New Life

Education City, with McKinsey’s backing, was conceived as a regional hub in healthcare, education, finance and ICT services worth $1 billion. Authorities allocated $9 billion to the initiative.

It was envisaged that branches of some of the world’s most prestigious universities, as well as research centres, laboratories, hotels and venues would be located here.

Education City was closed in 2014. But roads, bridges, water supply and power lines remained — building blocks for Bitcoin mining.

In response to DHI, the existence of mining facilities for the first cryptocurrency was confirmed. However the company declined to comment on their location.

It was expected that mining would diversify the kingdom’s income sources, which are formed by tourism and the export of surplus hydropower. But the COVID-19 pandemic prompted a rethink and a need to alter course — in 2020 the authorities began actively developing mining of the first cryptocurrency.

According to The Bhutanese, DHI began mining Bitcoin when it cost $5,000. The company now says they have “a net positive position on digital assets.”

In the face of political and economic crisis in the sovereign fund, it was announced that a portion of the mined coins would be sold.

The Role of Bitdeer

Journalists suggested that state farms might be less powerful than those owned by Bitdeer.

In May the company signed an agreement with the state-owned Druk Holding & Investments of Bhutan to develop cryptocurrency mining operations in the country with a budget of $500 million. It is expected that the Gedu data centre’s capacity will be 600 MW at a hash rate of around 20 EH/s — higher than the rest of Bhutan consumes.

In July media reported that the company began raising funds for the Green Bitcoin Fund to invest in Bhutan’s mining industry.

In the same month Bitdeer completed construction of a Bitcoin mining facility in the city of Gedu. According to satellite images, the facility’s capacity may currently be 100 MW.

Bitdeer listing on Nasdaq through a reverse merger with SPAC Blue Safari Group Acquisition Corp.