Nestled behind a hillside south of Thimphu, the capital of Bhutan, lies a secret crypto kingdom. Here, dozens of shipping containers conceal a multi-million dollar operation: machines working tirelessly to mine Bitcoin. Under the reign of Jigme Khesar Namgyel Wangchuck, the "Dragon King," Bhutan has discreetly transformed into a crypto Shangri-La, dedicating land, funding, and energy to these operations, reported . Although Bhutan's government has been tight-lipped about the exact locations and scale of these facilities, the bankruptcies of crypto lenders BlockFi and Celsius led to the country’s significant portfolio being exposed, forcing the government to acknowledge the existence of its portfolio. Through satellite imagery and sources familiar with Bhutan's , identified four mining sites, including a pilot location near Dochula Pass, another near Trongsa, and one in the forested district of Dagana. The largest of these, however, is built on the remnants of “Education City”, a failed $1 billion government project. Failed dreams of education. The seeds of the dreams of an Education City were planted by the Royal Education Council as early as 2007, reported in 2014. Controversial right from the start, Education City was touted as a billion-dollar project to create a world-class regional hub for health, education, finance, and ICT services. Poor management and allegations of corruption proved to be the final nails in the coffin already plagued with a lack of planning and vision, land ownership, and legal issues amidst changing economic and political scenarios. However, the Education City’s legacy lives on, not in academic pursuits, but in the form of power lines, roads, and bridges— essential infrastructure for a burgeoning
Bitcoin mining industry. When the Covid pandemic struck the country, in 2020, the country was forced to find other avenues to source its revenue which had been largely relying on tourism, particularly from the $65-a-day visa fees. Faced with rising youth unemployment and brain drain, the dragon kingdom turned to Bitcoin, viewing it as an economic messiah. Despite the cryptocurrency’s collapse in recent years to under $17,000, Bhutan is said to be largely unaffected. Druk Holding and Investments (DHI), the agency overseeing Bhutan’s bitcoin operations, told that DHI was “currently net positive in our digital asset position.” reported that the agency had entered the mining space when bitcoin was valued at $5,000. Powering crypto dreams amidst energy concerns. With 1.5% of its population emigrating last year and a minimum wage of $45 per month, Bhutan's pursuit of bitcoin mining seeks to address pressing economic challenges. The nation’s foray into Bitcoin mining is not without its challenges, energy being a huge concern. Embracing has led to a surge in energy consumption. While Bhutan historically sold surplus energy to
India, recent data revealed a 63% spike in power usage by the industry in 2022. The country, facing a looming trade deficit and a hard currency reserve dwindling to $689 million, is now grappling with increased electricity imports, with government officials warning of a $72 million bill for the coming winter. A spokesperson for DHI emphasized that the government would prioritize power supply for domestic consumption and said “Mining activity may be shut down subject to .” Nevertheless, Bhutan is betting big on Bitcoin, recently unveiling a decentralized app. Will this venture follow in the ill-fated steps of Education City? Only time will tell.