Africa is the least developed continent on Earth, with millions still without access to. Bitcoin mining, the process of minting new bitcoins, could help to build up Africa’s power grids and provide electricity to rural communities.
To “mine” for bitcoin, high-powered computers are used to verify virtual coin transactions. Bitcoin operates on what is known as a blockchain, essentially a public ledger, which contains the history of every transaction. The miners’ computers solve complicated math problems to add new blocks to the chain and are in turn rewarded with the digital token, making the endeavor profitable.
About every four years, the block rewards for bitcoin miners get slashed in half, reducing the supply of new bitcoins by 50%. That makes the product a scarcer commodity and tends to raise its price in the following months. So in the coming years, as more halvings occur, cheaper energy will be needed to maintain profit margins.
“There are a bunch of parts of Africa that essentially going to be able to electrify, bring grids online … because they are going to be able to use bitcoin miners to purchase energy and then build out an efficient energy grid.”during an interview on the sidelines of the Bitcoin Policy Institute’s annual summit on April 9 in Washington, D.C.
Crowder explained that if, several years down the line, the partnership has resulted in utility lines being built out and the energy is being used at full capacity for that area’s citizens, the miners can then relatively easily move to another energy asset. that the phenomenon involves “the market realizing that every single power generation station in a place that doesn’t really have a grid wastes energy.