Key Points
- Ethiopia is becoming a significant player in the Bitcoin mining industry, currently using 600MW of power.
- Despite half of the population lacking electricity, the country is set to increase its power capacity and enhance digital infrastructure.
Ethiopia is rising as a key player in the Bitcoin mining sector, with its local miners utilizing 600MW of power. The capacity is expected to increase further within the year.
Ethiopia’s Growing Bitcoin Mining Industry
Ethan Vera, the co-founder and COO of Luxor Mining, noted this rise in Ethiopia’s Bitcoin mining activity. According to data from Ethiopian Electric Power, the amount of power consumed by crypto miners is significant.
Ethiopia, with a total of 5,200 MW of installed generation capacity, mainly from hydropower, is set to add several hundred more megawatts of capacity by year-end. This is part of its swift expansion in the global mining market.
Most mining operations in Ethiopia utilize mid-generation machines such as Bitmain’s S19J Pro and Canaan’s A1346 models. These machines, which are more affordable and less power-hungry, greatly benefit from Ethiopia’s low electricity costs. This makes Ethiopia an excellent location for this class of machine, as Vera pointed out.
Strategic Move into Bitcoin Mining
Ethiopia’s strategic move into Bitcoin mining is in line with its broader push to develop infrastructure for data mining and artificial intelligence training.
Earlier this year, Ethiopian Investment Holdings announced a preliminary agreement to support a $250 million project with the Hong Kong-based West Data Group. This is to enhance the country’s digital infrastructure. The government has consistently referred to such initiatives as part of its high-performance computing strategy, which includes Bitcoin mining.
The 2021 ban on crypto mining in China, coupled with Ethiopia’s government-authorized push into the sector in 2022, has led to increasing interest from miners seeking new opportunities in regions with lower electricity costs. However, approximately half of Ethiopia’s 120 million people still lack access to electricity.