African Bitcoin Mining Status Quo
Despite interest in the topic, most signs point to African countries collectively representing a small percentage of Bitcoin’s total hash rate. Data
collected by the Cambridge Centre for Alternative Finance, for example, claim that no African country contributes more than 0.14% of Bitcoin’s hash rate. That amount apparently comes from Egypt, the region’s largest hash rate contributor. This data set is notoriously problematic, but generally speaking, mining activity throughout the region is relatively small. Mining in Africa is nonetheless happening, and it’s growing. BigBlock DC is a prime example of a mining company operating in the region. It has shared
photos and videos of facility buildouts to Twitter. Additionally, there are reports of off-grid solar mining operations in Zimbabwe. And a Ghanian IT company has made claims of energizing the region’s first mining operation back in 2016.
Africa’s Potential To Power Bitcoin Mining
Few things excite Bitcoin miners more than cheap, abundant energy. Considering Africa’s potential future as a regional mining hub, its abundant energy resources are key. Here’s an overview.
African countries have some of the
largest untapped potential for large scale hydropower development in the world. It’s already the region’s main source of “clean” energy, and planned developments mean that is shows no signs of losing pace.
Africa also has more potential solar resources than any other continent, although solar power development is not widespread or significant. One study found that a solar power farm covering
0.3% of North Africa could supply all of the energy required to power the European Union.
Flare gas is also a strong contender as a power source for African mining activity. Angola, for example, has already sought ways to
monetize its gas flaring activity, and is the region’s second-largest crude producer. Nuclear energy is one of the most scarce forms of power in Africa. Out of 54 countries in the region, only South Africa
has operational nuclear facilities. South Africa currently generates over 10 billion kilowatt hours (KWh) baseload electricity at the Koeberg nuclear power station in Cape Town. Bitcoin miners and the nuclear energy industry are rapidly forming strong relationships, and hopefully this trend extends to Africa to catalyze more nuclear development.
Beyond Bitcoin Mining
Setting aside the mining sector, Africa’s leading role in growing global Bitcoin use is no secret. A steady stream of headlines over the past few years in particular have highlighted the region’s surge in interest for Bitcoin from investors, developers, merchants and other users. For instance:
Paxful CEO Ray Youssef says Africa is “
leading” cryptocurrency adoption Square CEO Jack Dorsey says Africa “
will define the future” of Bitcoin Programs like
Qala are recruiting and training Bitcoin developers Even the UN has
noticed Bitcoin and crypto use in Africa Central African Republic
was the second country to adopt bitcoin as legal tender Kenya has one of the highest per capita levels
of bitcoin ownership, according to a UN brief
Widespread interest in buying and using bitcoin typically precedes strong interest in mining bitcoin, too. China, the U.S. and parts of Latin America, for example, have historically been geographic leaders in bitcoin investment and use, and it’s no coincidence that these regions are also leaders in retail and industrial-scale mining activity. Although it doesn’t necessarily explain all of the apparent interest in mining from various African countries, people who want bitcoin tend to also eventually want to learn how to mine it.
Mining: The Natural Step In Africa’s Bitcoin Journey
At the risk of reiterating the obvious, much of this article is speculative analysis based on a few statistical and anecdotal signals of mining growth throughout Africa. It’s hard to know for sure if or when parts of that region will become the next
Texas or Kazakhstan for the mining sector.
But what is certain is that the existing mining activity there is not slowing and a sustained level of general curiosity about mining is seen in Google Search queries. And, of course, the region’s general interest in understanding, using and building with Bitcoin has been widely reported.
Given Africa’s excitement over Bitcoin and its abundant, diverse energy resources, mining is a natural step in the region’s Bitcoin narrative arc. Africa’s Bitcoin future is no doubt a bright one, and mining could play a prominent role in it.
This is a guest post by Zack Voell.