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UAE: Bitcoin mining could lower energy costs, expert says

Bitcoin mining is an energy intensive process that uses up a lot of electricity

Published: Mon 9 Dec 2024, 6:19 PM

Updated: Mon 9 Dec 2024, 8:33 PM

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Photo by Reuters used for illustrative purposes

Photo by Reuters used for illustrative purposes

Bitcoin miners in the UAE could play a key role in reducing electricity costs, according to an expert, by bridging the gap in demand during off-peak hours and winter months. This, in turn, would help improve the efficiency of power generation systems, making electricity cheaper for consumers.

Jaran Mellerud, co-founder of Hashlabs Mining, explained that the government could work with bitcoin miners to run their operations during periods of lower electricity demand. “The government can work out a system with bitcoin miners to ensure that they run their mining systems at off-peak hours or winter months,” he said.

“This will ensure that the systems will run at the full efficiency that they are constructed for at all times. When systems run at full efficiency, it ensures that electricity production is cost-effective and is eventually cheaper for the consumers," Mellerud added.

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Mellerud made these remarks at the Bitcoin MENA conference in Abu Dhabi on Monday, a two-day event that brings together the global Bitcoin community to discuss opportunities, challenges, and innovations in the sector.

Jaran Mellerud at the Bitcoin MENA conference

Jaran Mellerud at the Bitcoin MENA conference

Bitcoin mining is an energy intensive process that uses up a lot of electricity. Official estimates put the energy needed for mining at about 91 terawatt-hours (TWh) of electricity annually- which is more than what several countries around the world uses.

However, Mellerud highlighted that bitcoin mining offers flexibility that other energy-consuming industries cannot. “Unlike a factory or energy plant, mining operations can be switched off almost instantly,” he said. “If energy consumption spikes, miners can pause their activities and resume when the demand is lower.”

Mellerud pointed to the success of similar systems in places like Texas, where miners and government agencies have worked together to create an efficient energy marketplace. "They have a system where it is almost like an electricity marketplace," he said. “Texas has implemented a system that benefits both the miners and the government. The UAE, with its high temperatures and dusty conditions, could benefit from a similar approach,” he said.

Drawing on his extensive research into the region’s crypto mining landscape, Mellerud said the GCC has significant potential to become a world leader in bitcoin mining. “If GCC countries allocated just 2 percent of their electricity generation to mining, they could account for 8.4 percent of the global hashrate and mine around 16,000 BTC annually,” he said.

With the UAE’s large nuclear power plant and abundant solar energy, Mellerud believes the country could become a global powerhouse in cryptocurrency mining, positioning itself as a game-changer in the industry.

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