Oman: A Rising Player in Bitcoin Mining
In today’s dynamic global environment, countries are fiercely competing for dominance in the Bitcoin mining industry. Surprisingly, Oman has emerged as a dark horse with ambitious plans to capture 7% of the global Bitcoin hash rate by June 2025. This goal is not just wishful thinking; it is supported by factual data presented in a recent report by Bitcoin mining expert Jaran Mellerud.
The Transformation of Oman’s Economy
Traditionally reliant on oil, Oman is located on the southeastern coast of the Arabian Peninsula and shares borders with Saudi Arabia, the United Arab Emirates, and Yemen. Historically, it has been the sixth-largest oil producer per capita worldwide. However, Oman is now shifting its focus towards Bitcoin mining, embracing the winds of change.
Oman’s Path to Becoming a Bitcoin Mining Heavyweight
As of September 2023, Oman has approximately 20 MW of mining capacity in operation. This includes pilot projects by Exahertz (11 MW) and Green Data City (1.2 MW). Additionally, there are a few MWs of unlicensed operations. With an efficiency rate of 27.5 J/TH, Oman’s current power consumption translates to 0.7 EH/s, giving it a 0.2% share of the global hash rate.
By the end of 2023, Oman’s total hash rate could reach 4 EH/s, accounting for 0.9% of the Bitcoin mining network. This growth is mainly driven by Exahertz’s expansion to 100 MW.
But the growth doesn’t stop there. Mellerud’s projections indicate that by the second half of 2024, Exahertz will operate 275 MW, generating 9.9 EH/s. Simultaneously, Green Data City plans to commission 150 MW, yielding an estimated 5.5 EH/s. Together, these efforts could push Oman’s total hash rate to 15.7 EH/s in the second half of 2024, comprising around 2.6% of the network.
Exahertz and Green Data City have long-term visions to scale up to 800 MW and 400 MW, respectively. Assuming an average efficiency of 22 J/TH, their combined 1,200 MW could potentially generate a total of 54.8 EH/s. This would represent approximately 7% of the Bitcoin hash rate by June 2025, according to Mellerud’s estimates. It’s worth noting that the companies have not specified a timeline for their full expansion.
Strong Governmental Support
The Omani government plays a vital role in facilitating Bitcoin mining operations. Currently, only two companies, Exahertz and Green Data City, hold licenses for developing and operating Bitcoin mining facilities in the country.
Chairman of Oman’s Authority for Public Services Regulations, H.E Sheikh Mansour Bin Taleb Bin Ali Al Hinai, publicly emphasized the government’s support for privately-owned Bitcoin mining facilities. These facilities are expected to attract over $1.1 billion in investments. He stated that this initiative aligns with Oman’s commitment to diversify its economy, integrating modern technologies while upholding ethical and sustainable practices.
Electricity rates significantly impact the profitability of Bitcoin mining. In Oman, licensed miners enjoy electricity tariffs below $0.04 per kWh, which is highly competitive globally. This is in contrast to rates for households ($0.026 per kWh) and businesses ($0.166 per kWh).
Oman’s climate, particularly in areas like Salalah, provides a natural advantage for Bitcoin mining. Unlike many Middle Eastern countries, Salalah benefits from a microclimate with cooler temperatures, especially during the monsoon season. This climate advantage reduces cooling costs and enhances mining efficiency.
Furthermore, the Omani government aims to generate 30% of its electricity from renewable sources by 2030. Achieving this goal requires substantial development of Oman’s abundant solar resources, which perfectly aligns with the needs of Bitcoin miners who can profit from network fluctuations.
Oman’s strategic approach to Bitcoin mining is evident in its infrastructure development, governmental support, and utilization of natural advantages. Mellerud’s report foresees a promising future for the nation in the Bitcoin mining sector. If the projections hold true, Oman, in collaboration with other Middle Eastern nations, could capture 15% of the global Bitcoin mining hash rate in the coming years.
Hot Take
Oman’s entry into the Bitcoin mining sector showcases the country’s determination to diversify its economy and embrace emerging technologies. With its ambitious goals, supportive government policies, and natural advantages, Oman has the potential to become a significant player in the global Bitcoin mining landscape. Keep an eye on this rising star as it strives to capture a larger share of the market.
As of now, BTC is trading at $25,854.
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