Dubai has quickly become one of the world’s crypto-hubs following the introduction of efficient digital asset-friendly regulation.
In this column, we will explore how the emirate, with daily temperatures rising to 42°C in the summer, features optimal conditions for crypto mining businesses.
Dubai: The New Crypto Hub
With high temperatures and humidity, it’s safe to say that Dubai’s climate is not the most optimal for operating delicate electronics, like the equipment needed for crypto mining.
However, many entrepreneurs – myself included – are building their mining centers in the emirate, and not without reason.
Passed in late February and enacted on March 11, Dubai’s Virtual Asset Law (VAL) has established an efficient, clear and crypto-friendly regulation around the digital asset sector.
With the oversight of the independent Dubai Virtual Assets Regulatory Authority (VARA), the new framework transforms the emirate’s cryptocurrency industry from a legal gray zone into a fast-growing global hub that facilitates innovation and development with an open approach.
Furthermore, while the UAE plans to introduce a 9% federal corporate tax on business profits from June 2023 on taxable income above 375,000 AED ($102,000) outside free zones, this rate is much lower than what most nations charge, and it is well below the worldwide average of 23.54%.
In addition to low taxes, Dubai features one of the best labor forces globally, which comes in especially handy when you are building a technology company.
In terms of crypto mining
Crypto Mining
Cryptocurrency mining is defined as the process through which the transactions of a digital currency are authenticated then published to blockchain. For every crypto transaction conducted, a crypto miner is in charge of authenticating the information which, if approved, is then updated in the blockchain. Currently, the most popular cryptocurrencies being mined are Bitcoin, Litecoin, Ethereum Classic, Monero, and DASH. How is Cryptocurrency Mined?The process of crypto mining itself involves the solving of complex mathematical equations through the application of cryptographic hash functions. The crypto miner who can solve the solution first can authorize that cryptocurrency transaction while also receiving small cryptocurrency payments in exchange for services rendered. Crypto mining is competitive, tedious, and generally requires that miners possess advanced computers with specialized hardware, increased processing power, and an unwavering internet connection. Electricity, cost of internet, and computing hardware make up the bulk of the expenses that affect the net revenue created through crypto mining. Most cryptocurrency miners generate no than a couple of dollars per day. To perform crypto mining, miners must possess computer hardware that is accompanied by a graphical processing unit (GPU) chip or an application-specific integrated circuit (ASIC). Recommended computer brands include both Windows and Linux since non-Windows systems tend to have a difficult configuration process. Once acquired, crypto miners must ensure that they have a constant internet connection, have a means to cool-off hardware, possess a legitimate cryptocurrency mining software.Miners also often require membership with both online mining pools and cryptocurrency exchanges.
Cryptocurrency mining is defined as the process through which the transactions of a digital currency are authenticated then published to blockchain. For every crypto transaction conducted, a crypto miner is in charge of authenticating the information which, if approved, is then updated in the blockchain. Currently, the most popular cryptocurrencies being mined are Bitcoin, Litecoin, Ethereum Classic, Monero, and DASH. How is Cryptocurrency Mined?The process of crypto mining itself involves the solving of complex mathematical equations through the application of cryptographic hash functions. The crypto miner who can solve the solution first can authorize that cryptocurrency transaction while also receiving small cryptocurrency payments in exchange for services rendered. Crypto mining is competitive, tedious, and generally requires that miners possess advanced computers with specialized hardware, increased processing power, and an unwavering internet connection. Electricity, cost of internet, and computing hardware make up the bulk of the expenses that affect the net revenue created through crypto mining. Most cryptocurrency miners generate no than a couple of dollars per day. To perform crypto mining, miners must possess computer hardware that is accompanied by a graphical processing unit (GPU) chip or an application-specific integrated circuit (ASIC). Recommended computer brands include both Windows and Linux since non-Windows systems tend to have a difficult configuration process. Once acquired, crypto miners must ensure that they have a constant internet connection, have a means to cool-off hardware, possess a legitimate cryptocurrency mining software.Miners also often require membership with both online mining pools and cryptocurrency exchanges. Read this Term, the UAE had the 13th cheapest cost of electricity out of 190 countries analyzed by the World Bank in 2019.
As a result, while there are some challenges in terms of cooling and renewables usage, cryptocurrency mining can be highly profitable in Dubai if we use the right solutions (and this is also why the largest mining data center
Data Center
A data center is a building or network used to house computer systems and associated components, such as telecommunications and storage systems.This generally includes redundant or backup power supplies, redundant data communications connections, environmental controls, and various security devices. Large data centers are industrial scale operations using as much electricity as a small town.Over the past decade, data center space has been growing at an incredible rate. This has increased as more and more businesses are moving toward cloud computing.In addition to the demand, the overall amount of data that is stored is also at levels that would have been unheard of not so long ago, which has resulted in increasingly large data centers.Why are Data Centers Important?Technology operations are a crucial aspect of most corporate businesses and institutions. The prime concerns are business continuity; companies rely on their information systems to run their operations. If a system becomes unavailable, company operations may be impaired or stopped altogether. It is necessary to have a dependable infrastructure for IT operations to minimize any chance of disruption. Information security is also a concern, and for this reason, a data center provides a secure environment that minimizes the chances of a security breach. A data center must, therefore, keep high standards for assuring the integrity and functionality of its hosted computer environment. Data centers are extremely valuable constructs within the financial services industry. For example, banks and financial institutions safeguard customer information in both cloud and on-premise data centers, as well as on trading floors and in branch operations. Data centers and critical infrastructure must be reliable, secure and available to successfully deliver internal IT services and digital banking services.
A data center is a building or network used to house computer systems and associated components, such as telecommunications and storage systems.This generally includes redundant or backup power supplies, redundant data communications connections, environmental controls, and various security devices. Large data centers are industrial scale operations using as much electricity as a small town.Over the past decade, data center space has been growing at an incredible rate. This has increased as more and more businesses are moving toward cloud computing.In addition to the demand, the overall amount of data that is stored is also at levels that would have been unheard of not so long ago, which has resulted in increasingly large data centers.Why are Data Centers Important?Technology operations are a crucial aspect of most corporate businesses and institutions. The prime concerns are business continuity; companies rely on their information systems to run their operations. If a system becomes unavailable, company operations may be impaired or stopped altogether. It is necessary to have a dependable infrastructure for IT operations to minimize any chance of disruption. Information security is also a concern, and for this reason, a data center provides a secure environment that minimizes the chances of a security breach. A data center must, therefore, keep high standards for assuring the integrity and functionality of its hosted computer environment. Data centers are extremely valuable constructs within the financial services industry. For example, banks and financial institutions safeguard customer information in both cloud and on-premise data centers, as well as on trading floors and in branch operations. Data centers and critical infrastructure must be reliable, secure and available to successfully deliver internal IT services and digital banking services. Read this Term in the world launched in Dubai this year).
Tackling Hot Weather with Immersion Cooling
In many countries, the weather is suitable to leverage inexpensive air cooling to operate crypto mining equipment. Immersion cooling, where IT components and electronics are submerged in a thermally conductive and electrically insulating liquid or coolant, is rarely used due to its high costs and complex technological infrastructure requirements.
However, due to the high levels of heat and high humidity in Dubai, immersion cooling is the only cost-effective way to establish the operational activities of a mining data center in the emirate.
Strangely enough, immersion cooling is rarely considered when it comes to increasing the equipment’s hash rate. While it increases the service life of equipment due to reduced wear, this cooling practice enhances profitability by 150-200%.
Solar Energy and Its Challenges for Miners
For a long time, crypto mining has been heavily criticized for its substantial energy usage and potential environmental impact. Fortunately, renewables like solar power can provide an effective and green solution to this issue.
And, using solar energy has long been a reality in Dubai, as the world’s largest solar power plant is located here. At the same time, the UAE expects at least 20% of its installed electricity capacity to be from renewable sources by 2024.
However, one thing is to produce renewables, and another is to consume them as a blockchain business. For miners, the main obstacle to using solar energy is the cost of mining.
While miners need a continuous current supply, most solar panels can generate electricity for 16 hours a day and offer a usable capacity for businesses for only 8 hours a day. To solve this issue, mining firms have to invest heavily into building solar stations to expand capacity.
One way to tackle this challenge is by installing Tesla storage batteries to the solar panel infrastructure, making projects more attractive from an economic point of view.
Ilman Shazhaev, the Founder of the Bitcoin mining-powered GameFi metaverse Farcana, the OneBoost digital asset management company, as well as international data centers in Malaysia, Russia and China. Currently, Ilman is building a new data center in Dubai.
Dubai has quickly become one of the world’s crypto-hubs following the introduction of efficient digital asset-friendly regulation.
In this column, we will explore how the emirate, with daily temperatures rising to 42°C in the summer, features optimal conditions for crypto mining businesses.
Dubai: The New Crypto Hub
With high temperatures and humidity, it’s safe to say that Dubai’s climate is not the most optimal for operating delicate electronics, like the equipment needed for crypto mining.
However, many entrepreneurs – myself included – are building their mining centers in the emirate, and not without reason.
Passed in late February and enacted on March 11, Dubai’s Virtual Asset Law (VAL) has established an efficient, clear and crypto-friendly regulation around the digital asset sector.
With the oversight of the independent Dubai Virtual Assets Regulatory Authority (VARA), the new framework transforms the emirate’s cryptocurrency industry from a legal gray zone into a fast-growing global hub that facilitates innovation and development with an open approach.
Furthermore, while the UAE plans to introduce a 9% federal corporate tax on business profits from June 2023 on taxable income above 375,000 AED ($102,000) outside free zones, this rate is much lower than what most nations charge, and it is well below the worldwide average of 23.54%.
In addition to low taxes, Dubai features one of the best labor forces globally, which comes in especially handy when you are building a technology company.
In terms of crypto mining
Crypto Mining
Cryptocurrency mining is defined as the process through which the transactions of a digital currency are authenticated then published to blockchain. For every crypto transaction conducted, a crypto miner is in charge of authenticating the information which, if approved, is then updated in the blockchain. Currently, the most popular cryptocurrencies being mined are Bitcoin, Litecoin, Ethereum Classic, Monero, and DASH. How is Cryptocurrency Mined?The process of crypto mining itself involves the solving of complex mathematical equations through the application of cryptographic hash functions. The crypto miner who can solve the solution first can authorize that cryptocurrency transaction while also receiving small cryptocurrency payments in exchange for services rendered. Crypto mining is competitive, tedious, and generally requires that miners possess advanced computers with specialized hardware, increased processing power, and an unwavering internet connection. Electricity, cost of internet, and computing hardware make up the bulk of the expenses that affect the net revenue created through crypto mining. Most cryptocurrency miners generate no than a couple of dollars per day. To perform crypto mining, miners must possess computer hardware that is accompanied by a graphical processing unit (GPU) chip or an application-specific integrated circuit (ASIC). Recommended computer brands include both Windows and Linux since non-Windows systems tend to have a difficult configuration process. Once acquired, crypto miners must ensure that they have a constant internet connection, have a means to cool-off hardware, possess a legitimate cryptocurrency mining software.Miners also often require membership with both online mining pools and cryptocurrency exchanges.
Cryptocurrency mining is defined as the process through which the transactions of a digital currency are authenticated then published to blockchain. For every crypto transaction conducted, a crypto miner is in charge of authenticating the information which, if approved, is then updated in the blockchain. Currently, the most popular cryptocurrencies being mined are Bitcoin, Litecoin, Ethereum Classic, Monero, and DASH. How is Cryptocurrency Mined?The process of crypto mining itself involves the solving of complex mathematical equations through the application of cryptographic hash functions. The crypto miner who can solve the solution first can authorize that cryptocurrency transaction while also receiving small cryptocurrency payments in exchange for services rendered. Crypto mining is competitive, tedious, and generally requires that miners possess advanced computers with specialized hardware, increased processing power, and an unwavering internet connection. Electricity, cost of internet, and computing hardware make up the bulk of the expenses that affect the net revenue created through crypto mining. Most cryptocurrency miners generate no than a couple of dollars per day. To perform crypto mining, miners must possess computer hardware that is accompanied by a graphical processing unit (GPU) chip or an application-specific integrated circuit (ASIC). Recommended computer brands include both Windows and Linux since non-Windows systems tend to have a difficult configuration process. Once acquired, crypto miners must ensure that they have a constant internet connection, have a means to cool-off hardware, possess a legitimate cryptocurrency mining software.Miners also often require membership with both online mining pools and cryptocurrency exchanges. Read this Term, the UAE had the 13th cheapest cost of electricity out of 190 countries analyzed by the World Bank in 2019.
As a result, while there are some challenges in terms of cooling and renewables usage, cryptocurrency mining can be highly profitable in Dubai if we use the right solutions (and this is also why the largest mining data center
Data Center
A data center is a building or network used to house computer systems and associated components, such as telecommunications and storage systems.This generally includes redundant or backup power supplies, redundant data communications connections, environmental controls, and various security devices. Large data centers are industrial scale operations using as much electricity as a small town.Over the past decade, data center space has been growing at an incredible rate. This has increased as more and more businesses are moving toward cloud computing.In addition to the demand, the overall amount of data that is stored is also at levels that would have been unheard of not so long ago, which has resulted in increasingly large data centers.Why are Data Centers Important?Technology operations are a crucial aspect of most corporate businesses and institutions. The prime concerns are business continuity; companies rely on their information systems to run their operations. If a system becomes unavailable, company operations may be impaired or stopped altogether. It is necessary to have a dependable infrastructure for IT operations to minimize any chance of disruption. Information security is also a concern, and for this reason, a data center provides a secure environment that minimizes the chances of a security breach. A data center must, therefore, keep high standards for assuring the integrity and functionality of its hosted computer environment. Data centers are extremely valuable constructs within the financial services industry. For example, banks and financial institutions safeguard customer information in both cloud and on-premise data centers, as well as on trading floors and in branch operations. Data centers and critical infrastructure must be reliable, secure and available to successfully deliver internal IT services and digital banking services.
A data center is a building or network used to house computer systems and associated components, such as telecommunications and storage systems.This generally includes redundant or backup power supplies, redundant data communications connections, environmental controls, and various security devices. Large data centers are industrial scale operations using as much electricity as a small town.Over the past decade, data center space has been growing at an incredible rate. This has increased as more and more businesses are moving toward cloud computing.In addition to the demand, the overall amount of data that is stored is also at levels that would have been unheard of not so long ago, which has resulted in increasingly large data centers.Why are Data Centers Important?Technology operations are a crucial aspect of most corporate businesses and institutions. The prime concerns are business continuity; companies rely on their information systems to run their operations. If a system becomes unavailable, company operations may be impaired or stopped altogether. It is necessary to have a dependable infrastructure for IT operations to minimize any chance of disruption. Information security is also a concern, and for this reason, a data center provides a secure environment that minimizes the chances of a security breach. A data center must, therefore, keep high standards for assuring the integrity and functionality of its hosted computer environment. Data centers are extremely valuable constructs within the financial services industry. For example, banks and financial institutions safeguard customer information in both cloud and on-premise data centers, as well as on trading floors and in branch operations. Data centers and critical infrastructure must be reliable, secure and available to successfully deliver internal IT services and digital banking services. Read this Term in the world launched in Dubai this year).
Tackling Hot Weather with Immersion Cooling
In many countries, the weather is suitable to leverage inexpensive air cooling to operate crypto mining equipment. Immersion cooling, where IT components and electronics are submerged in a thermally conductive and electrically insulating liquid or coolant, is rarely used due to its high costs and complex technological infrastructure requirements.
However, due to the high levels of heat and high humidity in Dubai, immersion cooling is the only cost-effective way to establish the operational activities of a mining data center in the emirate.
Strangely enough, immersion cooling is rarely considered when it comes to increasing the equipment’s hash rate. While it increases the service life of equipment due to reduced wear, this cooling practice enhances profitability by 150-200%.
Solar Energy and Its Challenges for Miners
For a long time, crypto mining has been heavily criticized for its substantial energy usage and potential environmental impact. Fortunately, renewables like solar power can provide an effective and green solution to this issue.
And, using solar energy has long been a reality in Dubai, as the world’s largest solar power plant is located here. At the same time, the UAE expects at least 20% of its installed electricity capacity to be from renewable sources by 2024.
However, one thing is to produce renewables, and another is to consume them as a blockchain business. For miners, the main obstacle to using solar energy is the cost of mining.
While miners need a continuous current supply, most solar panels can generate electricity for 16 hours a day and offer a usable capacity for businesses for only 8 hours a day. To solve this issue, mining firms have to invest heavily into building solar stations to expand capacity.
One way to tackle this challenge is by installing Tesla storage batteries to the solar panel infrastructure, making projects more attractive from an economic point of view.
Ilman Shazhaev, the Founder of the Bitcoin mining-powered GameFi metaverse Farcana, the OneBoost digital asset management company, as well as international data centers in Malaysia, Russia and China. Currently, Ilman is building a new data center in Dubai.
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