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Bitcoin powers sustainable energy infrastructure in rural Africa

source-logo  finbold.com 25 May 2023 14:04, UTC

Considering that over 500 million people in Africa live in rural communities out of reach of main power grids, mining Bitcoin (BTC) has been a challenge. However, it has also sparked some creative solutions that might not only solve the problem of Bitcoin mining but also provide reliable electricity access in general.

Indeed, one of these solutions has been to build microgrids powered by renewable energy sources, and their potential has attracted both hobbyists and companies interested in mining Bitcoin, Nigerian Bitcoiner and CEO of a Bitcoin venture capital fund Recursive Capital, Abubakar Nur Khalil, said in his Forbes piece on May 24.

Hydropower minigrids

According to Khalil, one example is the Kenyan Bitcoin mining company Gridless which deploys hydro-powered microgrids (with a capacity of under 1 MW) to power three rural communities in East Africa and has recently reached more Kenyan communities thanks to the seed funding led by Jack Dorsey’s Block and Bitcoin VC firm Stillmark.

On top of that, Gridless has also created the Green African Mining Alliance (GAMA) with three other companies – QRB Labs from Ethiopia, Sukuma Ventures from Kenya, and Trojan Mining from Nigeria – with the goal to create a standardized approach to sustainable cryptocurrency mining.

Together, these companies released the ‘Blueprint for Bitcoin Mining and Energy in Africa’ report earlier in May, featuring actionable insights for “reducing the electricity-access gap in underprivileged regions with minigrids and small-scale Bitcoin data centers.”

According to the report:

“By providing a consistent and reliable demand for electricity, Bitcoin mining helps to utilize excess renewable energy that might otherwise go to waste, thereby unlocking the potential of stranded renewable energy projects and contributing to a more sustainable energy future.”

Interestingly, Finbold has earlier reported on the Virunga National Park in eastern Congo using its hydroelectric power for mining Bitcoin in an effort to provide the funding required to keep it afloat in the area affected by years of militia violence, deforestation, diseases, and lockdowns.

Regulatory uncertainty in Africa

That said, mining operators in Africa are facing a lack of regulatory clarity around their activities, and many choose to go off the grid in fear of drawing attention to themselves rather than joining public-facing corporate settings like GAMA.

In addition, even larger Bitcoin miners have issues with the regulators and authorities, ranging from the inability to obtain energy development licenses from the government to the high costs of importing the hardware necessary for crypto mining.

However, despite regulatory hurdles affecting the crypto sector, the blockchain community in Africa is thriving and has continued to attract massive investments, which have recorded a five-fold increase on the yearly level, demonstrating the VC interest in African blockchain companies that has been present since mid-2022.