About a month ago, China introduced restrictions on bitcoin mining. In May Elon Musk announced that Tesla would not accept bitcoin as a form of payment. The reason given by both the Chinese government and Elon was the environment.
According to the Cambridge Center for Alternative Finance (CCAF), bitcoin production consumes about 0.55% of global electricity produced. Of this figure it is difficult to ascertain how much of it is comes from renewable energy.
China’s bitcoin production accounts for almost half of the global total. With coal being the main source of electricity in China (this is changing) then it stands to reason that a good percentage of bitcoin production is done through dirty fuels.
Bitcoin miners earn revenue based on the hash rate. The hash rate is the measuring unit of the processing power of the bitcoin network. This then means that the closing of Chinas mines have made all other mining operations in the world more profitable.
There are a number of mini grids coming up on the continent of Africa. The major challenges of this mini grids is the consumption per customer is quite low. Perhaps miners should look for mini grid developers. They would provide a stable base load for them.
Miners should also look for countries with a high renewable energy mix. Kenya is one such country. Majority of the countries generation comes from green renewable sources of power. Utilities of countries that have embraced clean technology should at least think about this as a way to increase their base load and perhaps this mines could be located near the generation points. KenGen geo thermal plants fit this bill perfectly.
As always I remain a strong believer that tech can hugely benefit Africa. We just need to connect the dots.
Article Contributed by Msingo John
The writer is the East African Director for AfricaNEV and founder of Renewable Alternatives Ltd.