Cheap Energy Cost Fuels Chinese Bitcoin Miners’ Migration to Ethiopia

Ethiopia Emerges as Attractive Destination for Bitcoin Miners due to Cost-Effective Energy and Favorable Government Policies

Chinese Bitcoin miners are moving to Ethiopia because of its low energy costs.

David Pokima David Pokima | Last updated: February 12, 2024 05:30 EST | 2 min read

Cheap Energy Cost Fuels Chinese Bitcoin Miners Migration to Ethiopia Source: Dalle-3

Ethiopia has become a lucrative destination for Bitcoin miners with lower energy costs and friendly government policies driving the move.

According to Bloomberg, Bitcoin miners from China and other countries are setting up shop in the East African country, followed by energy deals with electricity companies.

Last year, mining equipment, including high-powered computers, were placed at electric substations connected to the Grand Ethiopian Renaissance Dam, showing signs of a departure from other jurisdictions.

In the following months, Bitcoin miners are now looking to grow operations in Ethiopia and rival Texas counterparts who became the new hub after the mining ban in China two years ago.

Bitcoin Mining Executives Eye Prospects in Ethiopia

Ethiopia gave the green light to cryptocurrency miners two years ago, and although trading remains prohibited, mining companies will leverage the reduced energy costs and partnerships with Chinese firms over the years.

Ethan Vera, the Chief Operating Officer of Luxor Technology, a mining services company, projected that Ethiopia is among the world’s top destinations for mining at the moment.

Nou Xu, founder of the China Digital Mining Association, explained that Ethiopia will be a destination for Chinese miners thanks to friendly government policies and cheaper energy costs.

Per the Bloomberg report, Ethiopian state-owned power companies have signed agreements with 21 Bitcoin mining companies, with 19 of them coming from China.

On the environmental front, Ethiopia’s electricity supply can rival Texas’ ability in a few years, with numerous dams and renewable energy sources opening up in recent years.

The country’s GERD power project boosted its production to 5.3 gigawatts and will double Ethiopia’s capacity upon completion.

All this, coupled with the lower cost, is what crypto miners need to weather the storm amid macroeconomic factors. Vitaliy Borshenko added that the country’s advantages go beyond energy to environmental conditions.

“The ideal temperature for the miners is 5 to 25 degrees Celsius (41F-77F). That is right in the average range of temperature in Ethiopia.”

All Isn’t Certain for Bitcoin Miners

Despite the surge in Bitcoin miners moving to Ethiopia, future government policies remain uncertain because of the nature of the activity.

China was once the hub of cryptocurrency mining, but the government clamped down on miners, citing environmental factors, leading to widespread migration and a slump in asset prices.

Although Ethiopia is looking for new sources of revenue and an inflow of foreign currency in its local market, nearly 50% of the population suffers from energy problems.

This fact can cause a shift in government stance in the future, as seen in the case of Kazakhstan and other countries that switched from a totally friendly stance to imposing certain limitations on mining activities.

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Q&A: Additional Topics on Bitcoin Mining in Ethiopia

Q: How do lower energy costs in Ethiopia compare to other countries?

A: Ethiopia offers significantly lower energy costs compared to countries like China and the United States. This makes it a highly attractive destination for Bitcoin miners who rely heavily on energy consumption.

Q: What are the advantages of mining in Ethiopia for Chinese miners?

A: Chinese miners find Ethiopia appealing due to the country’s friendly government policies and the availability of cheaper energy. This combination creates a lucrative environment for mining operations.

Q: Is Ethiopia’s electricity supply sustainable for Bitcoin mining?

A: Ethiopia has invested in numerous dams and renewable energy sources, making its electricity supply comparable to that of Texas. With the ongoing GERD power project, the country aims to double its capacity, providing a sustainable energy source for miners.

Q: Are there any potential challenges for Bitcoin miners in Ethiopia?

A: The uncertain future of government policies surrounding cryptocurrency mining in Ethiopia poses a potential challenge. Just as China clamped down on mining due to environmental concerns, it is possible that Ethiopia could impose limitations in the future.

Q: How does Ethiopia’s climate benefit Bitcoin mining operations?

A: The average temperature in Ethiopia falls within the ideal range of 5 to 25 degrees Celsius (41F-77F) for mining operations. This favorable climate reduces the need for additional cooling measures and enhances the overall efficiency of mining.

References: 1. The Washington Post: Bitcoin miners flock to Ethiopia for cheap energy, unsure of red tape 2. Bloomberg: Bitcoin Miners Swarm Ethiopian Hydropower 3. CNBC: Bitcoin mining in Texas: $100K/month profit, but every coin adds 80 tons of carbon emissions 4. The Guardian: Ethiopia’s Renaissance Dam: damming life or building a future? 5. Crypto News: Ethiopian Bitcoin Mining Farm Busted for Theft of Electricity

Now that you’ve learned about the thriving Bitcoin mining scene in Ethiopia, it’s time to share this fascinating information with your friends and colleagues! Who would’ve thought that a small country in East Africa could be a new hub for Bitcoin miners? 💡✨✌️

If you found this article helpful or intriguing, don’t hesitate to share it on social media and start a conversation about the future of cryptocurrency mining. And if you have any questions or additional insights, feel free to leave a comment below! 👇🗣️

Together, let’s explore the ever-evolving world of blockchain technology and digital assets!

Disclaimer: This article does not constitute financial advice. Cryptocurrency investments are subject to market risks, and individuals should conduct thorough research and seek professional advice before making any investment decisions.

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