The United Arab Emirates is gradually becoming a well-known Bitcoin mining centre in the Middle East. The country has become an attractive destination for cryptocurrency business, with over 30 free economic zones and increasing participation in Bitcoin mining activities.
It all started when Marathon Digital partnered with Zero Two, the digital assets arm of Abu Dhabi's sovereign wealth fund, in May this year. The joint venture established two 250MW mining sites located in Abu Dhabi.
This city has become a major centre for cryptocurrency miners due to its energy efficiency and commercial importance in the UAE.
Hashrate Index suggests that the total Bitcoin mining capacity in the UAE is probably 400 MW, or 4% of the global Bitcoin network hashrate. The US, China, Russia and Kazakhstan are among the top four countries with a significant share of the global Bitcoin hashrate. However, the UAE can move up the ladder due to its resources.
In recent years, the UAE has shifted from oil and gas reserves to solar and nuclear energy - previously using natural gas to generate electricity, solar and nuclear power are now rapidly expanding.
The UAE's electricity needs vary greatly between summer and winter, resulting in large amounts of electricity being wasted. In 2021 alone, 20 terawatt hours were wasted, which translates to $600 million. To fill this gap and avoid similar losses in the future, Bitcoin miners could use clean energy sources.
Over the next decade, most of the UAE's electricity will come from nuclear and renewable sources, which means there will be plenty of surplus for miners to utilise. They will also benefit from zero taxation in the country.
By registering in one of the thirty or more free trade zones across the country, Bitcoin miners can reap many benefits, such as exemption from corporate tax, value-added tax and import duties - a big advantage over working in countries out west.
