Ethiopia Rises as Crypto Mining Hub With 600MW Energy Dedicated to Bitcoin Mining

Key Takeaways

• Ethiopia plans to use its electricity surplus for Bitcoin mining operations.
• The Bitcoin miners in the country currently use up to 600 MW of electricity.
• Ethiopia legalized Bitcoin mining in 2022, offering cheap electricity from clean sources.

Ethiopia, rich in natural resources and hydropower, is quietly emerging as a hub for Bitcoin mining on the African continent.

Ethiopia Hosts 600MW of Operational Miners.

Ethan Vera, co-founder and chief operating officer of Luxor Mining, recently embarked on a tour of state-approved mining firms in Ethiopia.

Taking to social media , Vera shared his firsthand account of the mining operations, revealing that Ethiopian Electric Power (EEP) has dedicated nearly 600 megawatts (MW) to bitcoin miners operating in the country.

The Luxor executive shared that several hundred more megawatts are poised to come online later this year.

As per Vera, the Antminer S19J Pro is the most popular mining rig among Ethiopian miners, boasting an efficiency of 30 J/TH and a hash rate capacity of roughly 100 TH/s per unit.

Vera’s Twitter post included a photo of the mining operation and highlighted the impressive infrastructure built around these farms, including water walls designed to expedite heat dissipation.

However, he noted that these cooling systems are hardly necessary for most of the year due to the region’s cold weather conditions.

Ethiopia’s current mining capacity translates to a significant 2.25% of the total Bitcoin hash rate, making it a notable contributor from Africa. According to Luxor data, the country ranks fourth in Bitcoin mining hash rate contribution, trailing only the United States, Hong Kong, and Asia.

Since China banned bitcoin mining operations in 2021, the tiny African nation has attracted an influx of Chinese miners. With its abundant hydropower and surplus electricity generated from renewable resources, the Ethiopian government has made a concerted effort to leverage its potential and establish itself as a Bitcoin mining hub.

Ethiopia Turns to Bitcoin Mining To Tap into Hydropower Abundance

Ethiopia is pouring investments into building infrastructure tailored to Bitcoin mining following its legalization in 2022.

Ethiopian Investment Holdings (EIH), the government’s investment arm, signed a memorandum of understanding (MoU) worth $250 million with Hong Kong-based West Data Group. The partnership would see the Hong Kong-based company develop infrastructure for data mining and artificial intelligence training operations.

According to data from the International Trade Association, Ethiopia boasts an impressive 5,250 MW of installed generation capacity, with a staggering 90% of its electricity coming from clean hydropower plants. However, despite this abundance, only half of the country’s population has access to electricity, resulting in a significant surplus.

While the government plans to sell excess electricity to neighboring countries, the cost of building an electricity transmission system to facilitate this is prohibitively high. Bitcoin mining has emerged as a viable solution, enabling the government to utilize its surplus electricity without having to undertake costly infrastructure development.