Drawing inspiration from Bhutan’s bitcoin-friendly paradigm

Bhutan has been at the forefront of bitcoin mining, capitalizing on its hydropower resources and steadfast commitment, even during the times when the price of bitcoin stood at a modest US dollar 5,000.

Bimal Pratap Shah

  • Read Time 5 min.

The Bhutanese refugee scam reveals a disturbing reality of deep-rooted corruption within Nepal’s political landscape. It is truly disheartening to witness individuals in leadership positions, who vehemently advocate for socialism, democracy, communism, and good governance, being implicated in such a reprehensible act. While Nepal has unfortunately been associated with a fake Bhutanese refugee scam, it’s essential to highlight Bhutan’s positive outlook and its commitment to a prosperous future. The Kingdom of Bhutan, known for its unique pursuit of happiness and limited reliance on modern technology, has taken an interest in cryptocurrencies (cryptos) and is exploring their potential. While Bhutan has discreetly engaged in bitcoin mining for several years, Nepal has faced significant challenges due to its ban on cryptos, which has hindered the ability to make informed decisions about these digital assets and potentially reap their economic benefits. Nepal undoubtedly has much to gain from Bhutan’s experiences, particularly in the crucial aspect of legalizing cryptos.

Bitcoin mining has undergone a remarkable transformation, evolving from a mere hobbyist pursuit to a sophisticated industrial operation of considerable scale. The decentralized nature of bitcoin makes it a unique and programmable form of currency. With a fixed supply of 21 million coins, bitcoin facilitates direct transactions between users, removing the need for intermediaries or central authorities that often introduce inefficiencies and vulnerabilities. However, it is worth noting that bitcoin’s journey has not been without obstacles, as it currently faces prohibitions in several countries including China, Nepal, Afghanistan, Bangladesh, Morocco, Algeria, Egypt, and Bolivia, highlighting the diverse regulatory approaches and challenges faced by this disruptive technology.

The increasing number of bans, restrictions, and onerous taxes imposed on crypto activities in traditionally crypto-friendly countries has triggered a wave of mining operations seeking alternative locations with affordable electricity. Interestingly, countries boasting significant hydropower capacity have emerged as highly sought-after destinations for the miners. Bhutan, widely renowned for its unique concepts such as the Gross National Happiness index that prioritizes holistic well-being over narrow economic metrics like Gross Domestic Product, and its dedication to high-end tourism that preserves the nation’s pristine environment, experienced a severe blow to its tourism sector as a result of the COVID-19 pandemic. In response, the country has started exploring new horizons, including the realm of cryptos. Bhutan’s positive stance on cryptos, combined with its abundant and cost-effective hydropower resources, has captured the attention of bitcoin miners from around the world, as they seek a conducive environment for their operations.

Druk Holding & Investments (DHI), the state-owned commercial holding company of Bhutan, has set its sights on a truly ambitious endeavor—to raise up to half a billion USD for a groundbreaking crypto mining venture. Bhutan astutely recognizes the immense potential of harnessing renewable electricity for bitcoin mining, paving the way for a more sustainable approach to this innovative field. Remarkably, Bhutan has been at the forefront of bitcoin mining, capitalizing on its hydropower resources and steadfast commitment, even during the times when the price of bitcoin stood at a modest US dollar 5,000. With its forward-thinking actions, Bhutan is firmly establishing itself as a noteworthy participant in the field of mining.

Within the intricate web of the Bitcoin network, miners play a pivotal role as they join forces to create blocks that encapsulate vital transaction data and pertinent information. Engaging in an intense and competitive race against time, these miners utilize their computational prowess to solve complex puzzles, vying to be the first to add the next block to the blockchain. This remarkable feat is achieved through the utilization of the proof-of-work (PoW) consensus algorithm, which serves as the bedrock of the Bitcoin network’s security and integrity. The successful miner, who emerges victorious from this arduous competition, is duly rewarded with freshly minted bitcoins, aptly referred to as the coveted block reward. It is through the interlinking of each block with its predecessor that a continuous and immutable chain of blocks takes shape, forging a transparent ledger that meticulously records legitimate transactions with unwavering accuracy.

Currently, a few nations have come to recognize the paramount importance of promoting clean energy utilization within the mining industry. Notably, New York State has emerged as a pioneering leader by enacting a progressive two-year moratorium on proof-of-work (PoW) mining, setting a precedent for the rest of the United States and the world. Governor Kathy Hochul’s signature solidified this groundbreaking legislation, which imposes stringent restrictions on new mining operations unless they exclusively rely on renewable energy sources. This bold move underscores the global shift towards sustainable practices within the mining sector, emphasizing the collective objective of mitigating the environmental footprint associated with crypto mining. New York’s resolute action serves as a beacon, illuminating the path towards a future where responsible energy consumption and eco-consciousness are integral components of the mining landscape.

Nepal stands on the precipice of realizing its remarkable potential for harnessing the power of hydropower. The Himalayan nation proudly holds one of the highest hydropower potentials on the global stage, poised to generate a substantial amount of clean and renewable energy. With an estimated capacity reaching a staggering 83,000 MW, Nepal’s hydropower potential not only paves the way for enhanced energy security but also serves as a catalyst for economic growth and the transition towards sustainable and renewable energy sources. In this critical juncture, Nepal has an invaluable opportunity to glean invaluable insights from its neighbor, Bhutan. Recent events, including the ban on cryptos imposed by the Nepal Rastra Bank and the disconcerting designation of Kathmandu as one of the world’s most polluted cities, underscore the pressing need for Nepal to embrace Bhutan’s wisdom and experience. Drawing inspiration from Bhutan’s successes and the lessons it has learned, Nepal can carve out a path towards a brighter and more sustainable future. By safeguarding the well-being of its citizens and the preservation of its natural environment, as well as prioritizing renewable energy, Nepal can lead the way to long-term progress.

Bhutan’s economic philosophy stands as a testament to their innovative and holistic approach to development, with the renowned Gross National Happiness Index serving as a guiding principle. This unique framework prioritizes the well-being and happiness of its citizens alongside traditional economic growth. Nepal, inspired by Bhutan’s success, has an opportunity to explore and potentially adopt similar frameworks that guarantees the overall welfare of its people.

Furthermore, Bhutan’s remarkable achievements in renewable energy, particularly their successful utilization of hydropower, provide a compelling example for Nepal to follow. By embracing clean energy sources and reducing reliance on fossil fuels, Nepal can simultaneously tackle pressing environmental challenges and address its energy needs. Bhutan’s distinction as the only carbon-negative country in the world stands as a shining beacon, demonstrating the transformative power of sustainable practices and underscoring the immense potential for Nepal to forge a more prosperous and environmentally responsible path forward.

Moreover, Bhutan’s unwavering commitment to environmental conservation and the preservation of its natural landscapes serves as a shining example for Nepal as it grapples with the urgent need to combat pollution and improve air quality, particularly in Kathmandu. Nepal can benefit greatly from studying Bhutan’s proactive approach and incorporating their valuable insights into its own environmental initiatives. It is essential for Nepal to seize this opportunity to learn from Bhutan’s experiences in sustainable development and environmental protection, as this will pave the way for a more sustainable, prosperous, and environmentally friendly future for the nation. It is crucial to prioritize the preservation of our forests, even if it requires importing expensive furniture from foreign countries.

It is essential for Nepal to seize this opportunity to learn from Bhutan’s experiences in sustainable development and environmental protection.

In line with Nepal’s steadfast commitment to environmental conservation, the preservation of its breathtaking natural landscapes, and the happiness of its people, it is crucial to prioritize two key aspects: the legalization of cryptos and the exploration of hydropower’s potential for cryptos mining. By embracing cryptos, Nepal can unlock economic opportunities and foster financial innovation. Leveraging its abundant hydropower resources will enable sustainable and efficient crypto mining operations. These strategic decisions can position Nepal at the forefront of the digital revolution and drive economic growth.

The current discussion on the digital economy in parliament neglects the crucial aspect of cryptocurrencies like bitcoin.