{"id":6479,"date":"2025-01-07T15:18:36","date_gmt":"2025-01-07T15:18:36","guid":{"rendered":"https:\/\/dogewisperer.com\/?p=6479"},"modified":"2025-01-07T15:18:36","modified_gmt":"2025-01-07T15:18:36","slug":"how-ethiopias-low-energy-costs-allow-bit-mining-to-recycle-its-bitcoin-machines","status":"publish","type":"post","link":"https:\/\/dogewisperer.com\/?p=6479","title":{"rendered":"How Ethiopia\u2019s Low Energy Costs Allow BIT Mining to Recycle its Bitcoin Machines"},"content":{"rendered":"
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Landlocked between six different neighbors in the Horn of Africa, Ethiopia has approximately 120 million inhabitants, making it the second most populous nation on the continent, and a GDP of $163 billion, which puts it in the same economic league as Ukraine, Morocco, Slovakia or Kuwait.<\/p>\n

However, the country has also suffered from a bloody civil war, with several regions still under the control of anti-government forces, like the ethno-nationalist Amhara militia Fano.<\/p>\n

But that hasn\u2019t prevented Chinese bitcoin (BTC<\/a>) mining company BIT Mining (BTCM) from expanding its operations \u2014 until now confined to Akron, Ohio \u2014 into Ethiopia by signing a $14 million deal to acquire facilities worth 51 megawatts (MW) and almost 18,000 bitcoin mining rigs in the country.<\/p>\n

In fact, for Dr. Youwei Yang, chief economist at BIT Mining, Ethiopia\u2019s ultra-low electricity costs provide the firm with a unique opportunity to extend the shelf life of its bitcoin mining rigs which, due to the industry\u2019s extreme competitiveness, tend to become obsolete in the U.S. after roughly two or two-and-a-half years of activity, he said.<\/p>\n

\u201cThe price of electricity is maybe 70% higher in Ohio than in Ethiopia, sometimes almost double, so it can only run very advanced ASICs, like the newest or second newest generations,\u201d Yang told CoinDesk in an interview. \u201cNow we can just move older generation machines into Ethiopia.\u201d<\/p>\n

It\u2019s a big deal, because aside from mining litecoin (LTC<\/a>) and dogecoin (DOGE<\/a>), BIT Mining is mainly in the hosting business, meaning that it operates mining facilities for the sake of various clients. State-of-the-art mining rigs don\u2019t come cheap (a single machine fetching anywhere between $5,000 and $10,000 for retail buyers) and investors are naturally reluctant to send such expensive pieces of machinery to war-torn jurisdictions.<\/p>\n

The pitch, then, is to install the newer rigs in the U.S. and send out the aging ones to Ethiopia. That creates a positive feedback loop, because now investors can extract greater returns from their machines than if BIT Mining restricted itself to operating in the U.S. That, in turn, attracts more capital, Yang said.<\/p>\n

\u201cWe can get at least two extra years by moving the rigs to Ethiopia, and then maybe after that, they\u2019re completely done,\u201d Yang said.<\/p>\n

Mining bitcoin in Ethiopia<\/h2>\n

But why Ethiopia specifically? For one thing, the country\u2019s electric standard is similar to China\u2019s, which allows BIT Mining to leverage the expertise of its engineering team and redeploy some of the electric equipment it previously used in the Middle Kingdom before the bitcoin mining ban.<\/p>\n

Ethiopia also enjoys an abundance of hydroelectric power, some of it thanks to Chinese investments, which have totalled $8.5 billion across more than 3,000 projects in recent years. For example, China helped fund the construction of the Grand Ethiopian Renaissance Dam (GERD); once completed, it will be the largest dam in Africa and generate over 5,000 MW.<\/p>\n

Not all of Ethiopia\u2019s electric output has been put to use yet, however, and that has created a window of opportunity for bitcoin miners, especially since the Ethiopian government has been supportive of the mining industry. In fact, the country is home to 1.5%<\/a> of Bitcoin’s total hashrate, according to Hashrate Index, meaning that it contributes about as much to the network as Norway<\/a>.<\/p>\n

That\u2019s despite the fact that the Ethiopian federal government has a shaky control over the country\u2019s overall territory. Hundreds of thousands of Ethiopians were killed in the government\u2019s war against the Tigray People’s Liberation Front between 2020 and 2022, and the state only just signed a peace treaty in December with the Oromo Liberation Army, which it had been fighting in some form or other since the 1970s.<\/p>\n

When asked whether BIT Mining had concerns about the social unrest in the country, Yang replied that the firm had been \u201cstudying, researching and also visiting [Ethiopia] several times, just [ascertain] that it\u2019s a stable place.\u201d The decision was made to purchase a facility instead of building it from scratch to avoid any unforeseen trouble, he said.<\/p>\n

Even so, it was a challenge convincing BIT Mining employees to move to Ethiopia from their previous domiciles in the U.S. or China, Yang said.<\/p>\n

\u201cPeople obviously like to live and work in richer and safer countries,\u201d he said. While a third of the facility\u2019s operating team are foreign right now, the team will be composed of mostly locals down the line, he said.<\/p>\n

In the meantime, the company is on the lookout for new investments in the country \u2014 be them energy infrastructure projects, data centers for artificial intelligence (AI) purposes, or other bitcoin mining facilities.<\/p>\n

\u201cThere’s plenty of opportunities in Ethiopia,\u201d Yang said. \u201cThe AI thing\u2026 We’ve been studying it for the last six to nine months. We have the power. We have the people. We have the ability to do it. But [the whole process] is very capital heavy. Construction in the U.S. is a lot more expensive, so it’s very hard to do a pilot experiment, but it’s a lot easier to [try one] in Ethiopia.\u201d<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Landlocked between six different neighbors in the Horn of Africa, Ethiopia has approximately 120 million inhabitants, making it the second most populous nation on the continent, and a GDP of $163 billion, which puts it in the same economic league as Ukraine, Morocco, Slovakia or Kuwait. However, the country has also suffered from a bloody […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":0,"footnotes":""},"categories":[2],"tags":[3,4,5],"class_list":["post-6479","post","type-post","status-publish","format-standard","hentry","category-news","tag-crypto","tag-doge","tag-news"],"_links":{"self":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/6479","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6479"}],"version-history":[{"count":0,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/6479\/revisions"}],"wp:attachment":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6479"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6479"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6479"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}