Chinese Bitcoin miners are strategically focusing on Ethiopia, attracted by the promise of affordable energy and favorable climates. In recent months, the arrival of Chinese miners was evident as cargo containers appeared near electricity substations connected to Africa’s largest hydroelectric project, the Grand Ethiopian Renaissance Dam (GERD).
Ethiopia Becomes Top Choice for Chinese Miners
After facing regulatory hurdles in China, Bitcoin miners are scouting for jurisdictions with cost-effective electricity and favorable rules.With its remarkably low electricity rates and a government open to their operations, Ethiopia emerges as a promising prospect for Bitcoin miners amid escalating global concerns over the industry’s energy usage and environmental consequences.
According to Luxor Technology, Ethiopia has become a leading destination for Bitcoin mining hardware shipments, attracting a substantial number of Chinese miners. These miners capitalize on Ethiopia’s abundant hydropower reserves and the competitive rates offered by Ethiopian Electric Power (EEP).
With a renewable hydropower-based installed generation capacity of 5.3 gigawatts, Ethiopia presents an attractive option for miners prioritizing sustainability. While Chinese firms once held sway in Bitcoin mining, they now encounter formidable competition in established centers like Texas.
Ethiopian Electric Power (EEP) maintains a steady fixed rate of 3.14 US cents per kilowatt-hour, akin to Texan rates but with added stability. Additionally, Ethiopia’s moderate climate perfectly complements the ideal operating parameters for mining rigs.
Navigating Risk for Economic Gain
Although Ethiopia maintains its ban on cryptocurrency trading, it authorized Bitcoin mining activities in 2022, a decision bolstered by its deepening relationship with China.
Several Chinese firms involved in constructing the $4.8 billion Grand Ethiopian Renaissance Dam (GERD) are expected to provide power to the miners.As Chinese Bitcoin miners pour into Ethiopia, geopolitical dynamics intertwine, with China’s investments bolstering bilateral ties.
Ethiopia’s eagerness to attract foreign investment aligns with China’s broader strategy in Africa, fostering a mutually beneficial relationship. However, this endeavor carries risks. Ethiopian authorities proceed cautiously, mindful of the controversies surrounding Bitcoin mining and the need to balance economic gains with social impacts.
Despite uncertainties about regulations and long-term consequences, Chinese Bitcoin miners view Ethiopia as a promising frontier due to its affordable energy and favorable conditions.
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