UAE emerges as a pro-Bitcoin mining destination in the Middle East

Crypto Mining in the UAE

The United Arab Emirates (UAE) is becoming an increasingly popular destination for Bitcoin (BTC) mining. With over 30 free trade zones, the country is becoming a Web3-friendly environment for crypto-focused businesses and its contribution to the Bitcoin mining hash rate is growing.

Marathon Digital and Zero Two — the digital asset arm of Abu Dhabi’s sovereign wealth fund — made a joint venture in May to establish two mining sites with a combined 250-megawatt (MW) capacity in Abu Dhabi. This has made the city into a hub for all kinds of crypto mining activity due to its energy efficiency and its status as the center of trade in the UAE.

According to data from Hashrate Index, the UAE’s combined Bitcoin mining capacity is estimated to be around 400 MW — which is 4% of Bitcoin’s global hash rate. While the US, China, Russia and Kazakhstan are the top four countries with the largest share of the global hash rate, the UAE is gradually climbing the ladder due to its resources.

Crypto and the UAE

As a global player in the energy market, the UAE has shifted its focus from oil and gas reserves to solar and nuclear energy. Previously, natural gas was the primary source of electricity, but in recent years, nuclear and solar have seen a rapid increase in their share.

The UAE’s electricity needs vary greatly between the hottest and coolest months, resulting in a substantial loss of generated energy. For instance, in 2021, the country’s power and desalination plants wasted 20 terawatt hours, equating to around $600 million. This deficit and wastage could be filled by crypto miners.

Given that crypto mining is based on renewable energy sources, the UAE could see a considerable percentage of its energy coming from nuclear and renewable sources in the next decade. As a result, the surplus from these sources could be used by crypto miners. Additionally, the country’s zero-tax policy provides a significant advantage to miners over those operating in Western countries.

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