Recent media reports have highlighted the allocation of 2000 MW of power for Bitcoin (BTC) mining. In a country like Pakistan, where such developments are relatively uncommon, this marks a significant and noteworthy milestone.

However, amid the rapidly evolving global energy landscape, this initiative also presents a complex dilemma i.e., balancing the potential economic benefits of innovation with the challenges of managing the existing energy resources.

To fully grasp the situation, it is essential to understand how Bitcoin mining operates, including its key inputs and outputs, the valuation associated with the process, and the potential advantages it may bring to Pakistan.

“Bitcoin mining involves solving complex computational problems using specialized hardware (Application-Specific Integrated Circuits - ASICs), which requires significant energy consumption as an input. The output is the creation of new bitcoins as well as the validation of transactions on the blockchain for which the miners earn a transaction fee.”

The total computational power used to mine bitcoinand process transactions on the Bitcoin network is referred to as Hash rates. It increases when more miners or more powerful hardware are used. Bitcoin’s mining difficulty adjusts over time to ensure consistent block times (10 minutes), which may indirectly influence the required computational effort.

“The hash rate is directly proportional to the computational effort required to solve cryptographic puzzles in the Bitcoin network.........

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