During the session ‘Investments in Innovation and New Ventures,’ at the Bhutan Innovation Forum the issue of Bhutan’s Bitcoin mining came up.
The question from the audience was how safe is Bhutan’s crypto investment and how does bitcoin contribute to financial inclusion, raising financial consciousness and driving innovation, especially in Bhutan.
Going first, Pietro Veronesi, Professor of Finance, University of Chicago, said blockchain and crypto are different. He said bitcoin uses blockchain, but blockchain is actually an incredibly useful tool for providing information about transactions or anything else that uses digital identities or things like that.
He said in his personal opinion what worries him a little bit, is of over investing in crypto currencies and potentially be at risk of generating or being part of a financial crisis that they have seen in the last few years that had to do with crypto currencies.
“Unfortunately fraud or unfortunately misconceptions about some crypto tokens, etc, can generate really bad publicity, given the type of ideas that we have for Bhutan moving forward. If it was to be enveloped into such a crisis, they could be really shining a dark light into Bhutan.”
Responding to the above DHI CEO Ujjwal Deep Dahal said, “So if you look at bitcoin, there are two things I want to mention. Blockchain is what drives it. There is no intermediary for asset transfer. It’s a peer to peer for the first time ever because of blockchain.”
He when it comes to Bhutan, he looks at bitcoin as an energy battery.
“We have excess power during summer, and we mine some bitcoin. We can use it as an energy storage for winter.”
The DHI CEO said there is a beautiful use case for Bhutan as it’s a green bitcoin.
“For every bitcoin that’s mined in Bhutan, so much less is mined with coal anywhere else.”
He said bitcoin is a very tactical investment for Bhutan.
“If you compare it bitcoin to gold, you see a lot of similarities in terms of how gold is regulated and how bitcoin is algorithmically regulated for inflation. Gold is actually regulated with policy in terms of mining and energy spent in mining gold out of the ground. Energy in bitcoin is spent to build security in the asset.”
“So we look at bitcoin not only as an energy battery, but also as an asset of the future.”
Alex Fishman, Founder, Empros Capital, LLT said the way that Bhutan has approached bitcoin mining is a huge success, and he thinks it’s a great example of the kinds of things that should be used going forward.
“You know, using crypto mining to bootstrap clean energy is something that we’ve seen work in a number of other arenas. The way that Bhutan has done it is you could just think of it as a very effective way of financing the creation of clean infrastructure, which is obviously consistent with the values of the country,” added Alex.
However, Alex was not as gung ho about Block chain as an investment in other areas.
He said, “You know, personally, I don’t think that there are many equity investors, or any investors that are, excited about securitization or tokenization on the blockchain. You know that’s just my personal experience, but I do think as an example of innovation that can happen here, I think it’s terrific.”
Niko Jlich, CEO & Founder, Binifico in another session called ‘Blockchain and Decentralized AI’ said bitcoin mining by Bhutan is very impressive as it is about saving the excess power and using it as capital later.
He said bitcoin mining can be used to incentivise renewable energy as even someone with a solar panel on the roof can use it for mining when the power is not being used otherwise.
He called criticism of crypto mining over energy usage as being ‘fake news.’