A project to build two large-scale cryptocurrency mining facilities is underway in the United Arab Emirates (UAE). The high-tech data centers will rely on an innovative full immersion cooling solution to overcome the challenges posed by the desert climate, which renders traditional air-cooled mining infeasible.
Marathon Digital Holdings, a leading U.S.-based crypto mining company, and emerging blockchain infrastructure developer Zero Two, are collaborating on this project aiming to launch the Middle East’s first immersion Bitcoin mining operations. The partners have formed a joint venture, Abu Dhabi Global Markets (ADGM), to develop and run two new sites for digital asset mining with a combined capacity of 250 megawatts (MW), according to Marathon’s press release.
The larger, 200 MW facility will be constructed in Masdar City, the sustainability hub of Abu Dhabi, which is the capital city of UAE. On the other hand, the smaller one, a 50MW crypto farm, will be located in the port zone of Mina Zayed. The sites will be powered with excess energy, thereby increasing the base load and sustainability of Abu Dhabi’s power grid. The two companies emphasized their intention is to also offset any non-sustainably produced electricity used with clean energy certificates.
The construction of the crypto mining farms is already underway, and the mining equipment has been ordered. Both sites, which will have a combined hashrate of approximately 7 EH/s, are expected to come online as early as this year. Before initiating the project, Marathon Digital and Zero Two launched a pilot program to determine the feasibility of a large crypto mining operation in Abu Dhabi, where the hot desert climate renders air-cooled mining unfeasible.
The initial results of the pilot indicate that operating mining sites in the UAE is now feasible thanks to an immersion solution to cool the ASIC miners, custom-built by the two companies, and implementing proprietary software to optimize their performance. Immersion cooling is a technology that involves submerging mining equipment directly into a non-conductive liquid. The liquid does not harm the equipment but enables the heat generated by the mining operation to be effectively removed, thus allowing the machinery to operate without the need for air conditioning or any other cooling system.
The equity ownership in the ADGM joint venture will be 80% for Zero Two and 20% for Marathon, with capital contributions in 2023 expected to total about $406 million. The details about the mining project come after analysts recently predicted that increased regulatory pressures, energy costs, and taxes in current mining hotspots may result in a new migration of crypto miners to more favorable jurisdictions.
As the global crypto industry continues to grow at an unprecedented rate, the development of large-scale mining facilities in regions such as the Middle East represents a significant step forward in the decentralization of cryptocurrency mining operations. The use of immersion cooling technology could pave the way for crypto mining facilities to be set up in other countries with hot climates, such as those situated in Central Asia or Africa – providing new opportunities for growth and a more diversified mining ecosystem globally.
Overall, the successful implementation of the ADGM project could have a disruptive effect on the global mining landscape, both in terms of providing an alternative location for miners looking to relocate from regions with tight regulations or high energy costs and by introducing a more sustainable cooling method for power-hungry crypto mining operations. In addition, the project’s potential influence on the crypto market may also provide a significant boost to the UAE’s economy and cement its position as a leading player in the rapidly evolving blockchain space.
