Pakistani Province Announces Bitcoin Mining Operation

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In Brief
  • The government of the Pakistani province Khyber Pakhtunkhwa has announced the opening of state-run Bitcoin farms.

  • It has initially launched two farms to generate profit and stimulate the local economy.

  • Besides the Iranian government, this is one of the first government entities to bankroll a mining operation.

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Khyber Pakhtunkhwa (KP), a province of Pakistan, a country notorious for its tough sanctions on crypto users, has announced the launch of two government-run bitcoin mining farms.



These large-scale mining operations mark a first for a government-run entity to use public funds in the country.

The Pakistan government is likely still skeptical of bitcoin and other cryptocurrencies. However, it may see the need to compete as other countries adopt the technology.



Boosting KP’s Economy

According to Pakistani news outlet BOL News, the KP provincial government was ready to install the mining farms last week. This represents a big milestone in the local government’s fight against central regulations.

Besides the potential profits from mining and selling the bitcoins, these operations should provide a major boost to the local economy.

A bitcoin mining farm is a large warehouse filled with specific computer hardware meant to process and verify bitcoin transactions. This requires major energy expenditure to power the resource-intensive machines.

Following the Lead of Other Struggling Economies

Pakistan is one of the first governments to integrate Bitcoin mining into its funding model. It follows the footsteps of heavily-sanctioned Iran, which is struggling with its own economy.

Iran previously set up government-run mining operations as a way to generate profits and avoid sanctions. With the growing liquidity of bitcoin, this operation provides a steady funding source that could be relatively difficult to trace compared with other options.

Utilizing cheap electricity, both Iran and the KP government will likely continue expanding their mining operations.

Big Bitcoin Competition

Mining farms can contain thousands or even tens of thousands of Bitcoin miners needed to compete with other miners and verify transactions effectively.

Bitmain, a mining hardware production company that also runs its own massive mining farms, is valued somewhere between $40-$50 billion. The amount of energy required to earn a bitcoin block reward is becoming tougher and tougher.

Pakistan’s mining operation may not be as sophisticated as Bitmain’s, but it should still provide the opportunity to utilize marginally cheap electricity to generate profits.

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Harrison is an analyst, reporter, and lead specialist at BeInCrypto based out of Tel Aviv, Israel. Harrison has been involved in the cryptocurrency space since late 2016 and is passionate about decentralized ledger technology and its potential.

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