Ethiopia quickly emerges as a key player in global Bitcoin mining, using its renewable energy surplus to power operations. The country has allocated 600 megawatts (MW) of electricity for mining, attracting attention from international investors. After legalizing Bitcoin mining in 2022, Ethiopia is now one of Africa’s leading cryptocurrency hubs.

Ethan Vera, co-founder and COO of Luxor Mining, stated that the Ethiopian government, through its state-owned electricity provider, Ethiopian Electric Power (EEP), has committed 600MW to Bitcoin mining. Vera’s tour of the mining facilities revealed impressive infrastructure, with hundreds of additional megawatts expected to come online by year-end.

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Surplus Hydropower fuels Bitcoin mining growth

Ethiopia’s rise in the Bitcoin mining sector is fueled by its abundance of clean energy, primarily hydropower. The country has an installed generation capacity of 5,250 MW, with 90% of its electricity from renewable sources. However, only half of Ethiopia’s population has access to electricity, leaving a large surplus available for other uses.

Ethiopia has taken a proactive approach to capitalise on this surplus, seeking to utilise its energy cost-effectively. Bitcoin mining has emerged as a viable solution, providing a high return on energy use without extensive infrastructure development to export the excess power to neighbouring countries.

One key factor contributing to Ethiopia’s success in the Bitcoin mining industry is the use of efficient mining hardware. The Antminer S19J Pro, a popular mining rig in the country, is widely used due to its energy efficiency. It operates at 30 joules per terahash (J/TH) and can produce a hash rate of approximately 100 terahashes per second (TH/s). This makes it an ideal choice for maximising energy usage in the mining farms spread across Ethiopia.

Global recognition and Chinese miners flock to Ethiopia

Ethiopia’s increasing role in Bitcoin mining is gaining global recognition. The country accounts for 2.25% of the total global Bitcoin hash rate, making it the fourth-largest contributor globally, trailing only behind the United States, Hong Kong, and Asia. Ethiopia achieved this impressive standing relatively quickly, thanks to its strategic investment in clean energy and Bitcoin mining infrastructure.

Ethan Vera shared his experience on social media. He highlighted the advanced infrastructure around Ethiopia’s mining farms, including water walls designed to assist with heat dissipation. Vera noted that the cold weather in the region makes such cooling systems largely unnecessary for most of the year.

https://twitter.com/ethan_vera/status/1843549861683294364

After China’s ban on Bitcoin mining in 2021, many Chinese miners moved their operations to Ethiopia. The country’s clean, low-cost energy made it an ideal destination for miners seeking to continue their work. This influx of Chinese miners has increased Ethiopia’s mining capacity, boosting its hash rate and global influence in the industry.