In the United Arab Emirates (UAE) they are certainly not standing still in the field of crypto mining. In fact, they are significantly expanding their operations, which has now made them the largest BTC mining hub in the Middle East.
Mining in UAE is growing fast
The UAE therefore has friendly regulations regarding crypto mining, which seems to attract several major players. BitOasis, OKX and SmartLedger, among others, are present in the UAE. In addition, several billions are being invested in the adoption of blockchain in the region.
According to the mining company Luxor Technologies, recently a report released, the UAE now accounts for about 4% of the total global BTC hashrate.
And this in turn is relatively fast, because in 2021 the mining story in the UAE really started. That is when the sovereign wealth fund ‘Zero Two’ started working with the local miner called ‘Phoenix Technologies’ to jointly set up a 200 MW water-cooled facility.
Several mining companies have now started or have started a partnership with this sovereign wealth fund. This includes the American miner ‘Marathon Digital’. They will partner with Zero Two to set up a $400 million, 250 MW facility at 2 locations in Abu Dhabi.
It is estimated that the UAE now has a mining capacity of about 400 MW, which could rise to about 600 MW this year.
UAE more expensive than other regions
However, this growth does not come without its problems. Crypto-Mining in the UAE is generally significantly more expensive than in other areas. This is because much of the UAE is a desert area and the country experiences high temperatures for much of the year. This makes the construction of such facilities more complex and requires more investment in, among other things, the cooling of the equipment.
Marathon Digital has indicated that they have found a new kind of ‘tailor-made’ solution to cool their equipment. It remains to be seen how well this solution will work exactly, but the sounds are positive.
Finally, energy costs in the UAE are higher than in various other regions. In high season, industrial consumers pay up to $0.099 per kWh. By comparison, residential consumers pay $0.02, with agricultural energy being the most subsidized at $0.012. Despite these potential problems, crypto mining is booming in the UAE.