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UAE is becoming the leading destination for Bitcoin miners: Reports

TL;DR

  • The United Arab Emirates (UAE)has established itself as a pro-Web3 and crypto-friendly environment with over 30 free trade zones and a growing contribution to the Bitcoin mining hash rate.
  • Currently, the UAE’s combined Bitcoin mining capacity is estimated to be around 400 MW, accounting for approximately 4% of Bitcoin’s global hash rate.
  • The country experiences significant fluctuations in electricity demand between the hottest and coolest months, resulting in a considerable loss of generated electricity.

The United Arab Emirates (UAE) is quickly emerging as a leading destination for Bitcoin mining in the Middle East. With over 30 free trade zones and a growing contribution to the Bitcoin mining hash rate, the country has established itself as a pro-Web3 and crypto-friendly environment.

In May, the country’s foray into Bitcoin mining began when Marathon Digital, a prominent Bitcoin miner, partnered with Zero Two, the digital asset arm of Abu Dhabi’s sovereign wealth fund. Together, they established two mining sites in Abu Dhabi with a combined capacity of 250 megawatts (MW).

Abu Dhabi, known for its energy efficiency and status as a trading hub, has become a focal point for various crypto-mining activities in the UAE. Currently, the UAE’s combined Bitcoin mining capacity is estimated to be around 400 MW, accounting for approximately 4% of Bitcoin’s global hash rate. While countries like the United States, China, Russia, and Kazakhstan dominate the global hash rate, the UAE has the potential to climb the ranks due to its available resources.

The UAE is a significant player in the global energy market, and it has been shifting its focus from traditional oil and gas reserves to renewable sources such as solar and nuclear energy. The country’s electricity generation previously relied heavily on natural gas, but there has been a notable increase in the adoption of nuclear and solar energy. 

UAE’s favorable mining conditions

Additionally, the UAE experiences significant fluctuations in electricity demand between the hottest and coolest months, resulting in a considerable loss of generated electricity. In 2021 alone, the UAE’s power and desalination plants wasted 20 terawatt hours, amounting to around $600 million. Bitcoin miners could help fill this gap by utilizing surplus energy. Since Bitcoin mining is increasingly focused on using clean energy sources, the UAE could benefit from its investments in nuclear and renewable energy, making it an attractive destination for miners in the coming years.

Moreover, the country offers significant advantages for Bitcoin miners, including its zero-tax policy. Miners can register their operations in one of the country’s numerous free trade zones, allowing them to avoid corporate tax, value-added tax, and import duties. This advantage over operating in Western countries provides a favorable business environment for miners and further encourages the growth of the industry in the UAE.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Lacton Muriuki

Lacton is an experienced journalist specializing in blockchain-based technologies, including NFTs and cryptocurrency. He dabbles in daily crypto news rich with well-researched stats. He adds aesthetic appeal, adding a human face to technology.

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