Ethiopia is quietly transforming into a major Bitcoin mining hub on the African continent. The country's abundant hydropower resources are being harnessed to fuel a growing crypto mining industry.
Ethiopian Electric Power (EEP) has allocated 600 megawatts (MW) to Bitcoin miners operating within the country. This significant commitment places Ethiopia fourth globally in Bitcoin mining hash rate contribution, behind only the United States, Hong Kong, and Asia.
Ethan Vera, co-founder and COO of Luxor Mining, recently toured state-approved mining facilities in Ethiopia. He reported that several hundred additional megawatts are expected to come online later this year. The Antminer S19J Pro is the preferred mining rig among Ethiopian operators. It boasts an efficiency of 30 J/TH and a hash rate capacity of approximately 100 TH/s per unit.
Vera noted the impressive infrastructure surrounding these mining farms. Water walls have been installed to accelerate heat dissipation. However, the region's cold climate renders these cooling systems largely unnecessary for most of the year.
Ethiopia's current mining capacity represents about 2.25% of the total Bitcoin hash rate. This makes it a significant player in the global crypto mining landscape. The country's rise as a mining hub began in the wake of China's 2021 ban on Bitcoin mining. Many Chinese miners relocated to Ethiopia, attracted by its abundant hydropower and favorable regulatory environment.
Ethiopia Legalized Bitcoin mining in 2022. Since then, the government has been heavily funding infrastructure to boost the sector.
The state's investment arm, Ethiopian Investment Holdings (EIH), lately signed a $250 million memorandum of understanding with West Data Group based in Hong Kong. This cooperation seeks to build infrastructure for operations involving data mining and artificial intelligence training.
The International Trade Association claims Ethiopia has 5,250 MW of installed generating capability. Of this power, an astounding ninety percent comes from environmentally friendly hydropower plants. Despite this plenty, just half of Ethiopia's people have access to electricity. The government is eager to profit from the notable excess this leaves.
Although plans call for selling extra electricity to surrounding nations, building transmission infrastructure is too expensive. One practical substitute that lets Ethiopia make use of its excess electricity without large infrastructure spending is bitcoin mining.
Ethiopia is positioning itself as a major actor in the worldwide Bitcoin network as it keeps expanding its crypto mining industry. The nation's dedication to using its natural resources for this growing sector could have wide-ranging effects on its economy and the larger African tech scene.