Ethiopia: A Lucrative Destination for Bitcoin Miners
Ethiopia has become an attractive location for Bitcoin miners due to its lower energy costs and favorable government policies. According to Bloomberg, Chinese and international miners are setting up operations in the East African country, establishing energy deals with local electricity companies. In a departure from other jurisdictions, mining equipment was placed at electric substations connected to the Grand Ethiopian Renaissance Dam last year.
Bitcoin miners are now looking to expand their operations in Ethiopia, competing with their counterparts in Texas, which became a hub after China’s mining ban two years ago.
Bitcoin Mining Executives See Potential in Ethiopia
Ethiopia permitted cryptocurrency mining two years ago, attracting mining companies with reduced energy costs and partnerships with Chinese firms. Ethan Vera, the COO of Luxor Technology, projected that Ethiopia is now one of the top global mining destinations. Nou Xu, founder of the China Digital Mining Association, explained that Chinese miners see Ethiopia as an appealing destination due to friendly government policies and lower energy costs.
State-owned power companies in Ethiopia have signed agreements with 21 Bitcoin mining firms, with 19 of them coming from China. Additionally, Ethiopia’s abundant dams and renewable energy sources have boosted its electricity supply capacity.
Challenges and Uncertainties for Bitcoin Miners
Despite the influx of Bitcoin miners into Ethiopia, future government policies regarding mining activities remain uncertain due to the nature of the industry. Similar to China’s crackdown on miners citing environmental concerns, Ethiopia may change its stance in the future. Furthermore, about 50% of the Ethiopian population faces energy problems, which could also influence government decisions.
Nemo Senret, CEO of QRB Labs, highlighted the challenges and uncertainties faced by miners in Ethiopia, including heavy regulations and the need for permissions from the government.
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