Ethiopia Partners with Hong Kong Data Centre for Crypto Mining Project
Ethiopia has signed a memorandum of understanding with Data Centre Service, a subsidiary of Hong Kong’s West Data, to develop a $250 million data mining infrastructure project in the country. The move comes as many Chinese crypto mining operations relocate to Ethiopia following China’s crackdown on crypto in 2021. While Hong Kong is more welcoming to crypto, the two governments remain closely linked.
Ethiopian Investment Holdings announced the deal on LinkedIn, although details of the deal’s value or counterparty were subsequently deleted. The partnership also aims to promote AI training throughout Ethiopia.
Why Miners Love Ethiopia
Ethiopia began welcoming miners in 2022, although trading crypto is still prohibited. However, the reduced energy costs and favorable government policies make it an attractive destination for mining operations. The upcoming Bitcoin halving event on April 19 further incentivizes miners to set up shop in Ethiopia.
The halving event occurs every four years when miners’ Bitcoin rewards are cut in half. This forces large operations to upgrade and expand their mining capacity to remain profitable. Historically, this global supply squeeze has driven up the price of Bitcoin.
One of the reasons why Ethiopia is appealing to miners is its abundance of hydroelectric power and other renewable energy sources. The Grand Ethiopian Renaissance Dam has increased the country’s generation capacity to 5.3 gigawatts, with 92% coming from hydroelectric sources.
In a recent Bloomberg article, a senior executive at Bitmain, a leading global supplier of mining hardware, mentioned that Ethiopia may soon rival Texas’ generation capacity with several electricity generation projects underway. Texas currently leads in Bitcoin mining operations, accounting for 28.5% of the US’s hash rate.
Conclusion
Ethiopia’s partnership with Data Centre Service is a significant step towards establishing a thriving crypto mining industry in the country. With favorable government policies, cheaper energy costs, and a growing generation capacity, Ethiopia has the potential to become a major player in the global crypto mining market.
Disclaimer: This article is for informational purposes only and should not be taken as financial advice. Always do your own research before making any investment decisions.
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