containers began appearing near electricity substations connected to the recently built Grand Ethiopian Renaissance Dam, Africa’s largest. Inside were stacks of powerful, energy-guzzling computers.
Ethiopia has emerged as a rare opportunity for all firms that mine the original cryptocurrency, as climate change and power scarcity fuel a backlash against the $16-billion/year industry elsewhere. But it holds special appeal for Chinese companies, which once dominated bitcoin mining but have struggled to compete with local rivals in Texas, the current hub.
The state power monopoly says it has struck power supply deals with 21 bitcoin miners. All but two of them are Chinese.“Ethiopia will become one of the most popular destinations for Chinese miners,” said Nuo Xu, founder of China Digital Mining Association, which organises exhibitions and facilitates trading in mining machines. He’s arranging a trip to Ethiopia for a group of Chinese mining executives to tour potential sites.
The rigs use vast amounts of power, so access to cheap electricity is a critical competitive advantage. Bitcoin mining consumed 121TWh of power in 2023, the Cambridge Centre for Alternative Finance estimates — similar to Argentina’s use. Electricity can account for as much as 80% of miners’ operating costs, according to Mellerud.
“Ethiopia is heavily regulated,” said Nemo Semret, CEO of local miner QRB Labs, who helped lobby officials to permit bitcoin mining. “Introducing a new sector like this has been a big challenge, and we’ve been working for the last two years to get all the necessary permissions from the government.” The African country’s capacity to supply electricity for creating bitcoin may rival that of Texas in a few years, according to a senior executive at Bitmain, the Beijing-based firm that’s the dominant supplier of rigs. The opening of the GERD project increased Ethiopia’s installed generation capacity to 5.3GW, 92% of which comes from hydropower, a renewable energy source.