Ethiopia is rapidly becoming a Bitcoin mining hub. It currently consumes 600 megawatts (MW) and will add further capacity later this year. Ethan Vera, COO at Luxor Mining, has explained why this is significant power consumption by X thread, echoing information from Ethiopian Electric Power on the country’s growing interest in cryptocurrency mining.
Ethiopia is positioned to boost its mining capacity with many more megawatts of installed generation capacity, chiefly hydropower, and a couple hundred more megawatts to close the year. It has installed nearly 5,200 MW of generation capacity, primarily from hydropower.
Vera said most local mining operations use mid-generation machines such as Bitmain’s S19J Pro and Canaan’s A1346. Ethiopia’s low electricity costs make it a good place to operate these machines, which are less expensive and more efficient than their diesel-running counterparts.
Ethiopia’s Bitcoin mining strategy supports data infrastructure development
That makes Ethiopia’s move into Bitcoin mining part of its overall strategy to develop the infrastructure for data mining and AI training. Last month, Ethiopian Investment Holdings announced a preliminary agreement to partner with Hong Kong-based West Data Group on a $250 million investment that would help improve the country’s digital capacity.
The specifics of the agreement are still somewhat obscure, but the Ethiopian government has consistently put Bitcoin mining within the framework of its high-performance computing strategy, which includes it.
China’s 2021 ban on cryptocurrency mining has engendered interest in Ethiopia’s mining sector, as miners, driven to look for cheaper electricity, are pursuing new opportunities in regions such as Ethiopia. Although Ethiopia has made progress in expanding its electricity supply, half of its 120 million inhabitants are still without electricity, and the challenges in Ethiopia’s energy landscape remain.
Heading into the future, the combination of cheap energy costs and government support is a promising recipe for the future of Bitcoin mining in East Africa.
