I gotta admit, I’m not an expert on this part of Bitcoin. But from what I’ve learned, miners tend to look for spots with cheap and reliable electricity, good government policies, safety, low pollution, and decent infrastructure. Getting low-cost, steady power boosts profit chances, while supportive governments and security ensure the business can last. A clean environment helps tackle mining emissions, and good facilities mean miners and their families can have a decent life. Not every African country has all these traits, but some do. Here’s why I think miners should check out Africa.
For humanitarian reasons: If you’re just chasing profits, Africa might not seem like the place to set up your mining operation. But if you want to make money while also helping boost living standards for locals, it could be the perfect spot. Africa could really use some support due to various challenges. Take Gridless, for instance. They kicked off a Bitcoin mining venture by utilizing 50 kW of clean and excess hydro energy in Malawi. Their operation has created jobs and economic growth, plus 1,600 homes now have a reliable power source thanks to this mine. Other companies like SustainSolar, Earth Wind and Power, and INENSUS have tapped into wasted energy for crypto mining and are helping generate electricity as a bonus.
Very good overlook on the situation and I think stuff like this is always appreciated by the community. What I think would be of high interest by others investors, would be to see if there are already successful bitcoin projects in Africa, and see how they go. What investors always fear is to invest into something where they can not calculate the risk. Afrika seems to be in many areas a continent where the risk can hardly be calculated. If you however give examples on companies that already do buisness there than you can take this into account.
This would be more enticing if Africa offers the cheapest electricity but placing in 8th 15th and 27th is somehow way more expensive than mining on the ranked 1st to 7th. In terms of government regulation, it is not an assurance that a country will be friendly if they don't have any law about crypto mining activities. Anytime this country can turn hostile if its leader somehow thinks that crypto miners are depleting their natural resources. If that time comes then a company that took advantage of the unregulated stance of many countries of Africa may have suffered huge losses.
Some of the African places today may be good as an alternative places for crypto mining but their unregulated stance is worrisome, especially in these three stated locations where the electricity is cheapest in that region.
According to the information on the internet Rwanda (the one that is ranked 8th in cheap electricity) deemed cryptocurrency as illegal[1]
Kenya's stance on cryptocurrency is somehow vague,. They do not have any regulatory law but somehow propose a bill to tax crypto[2]
Although South Africa is crypto friendly, they also don't have any regulatory law on cryptocurrency while the Nigeria government is somehow hostile to cryprocurrency due to them favoring CBDC, they somehow have not tagged cryptocurrency as illegal yet.
In order to have an attractive place to set up Bitcoin mining, the stated factors by the OP should be met by the place where the mining farm is targeted. Patching good information about Africa that appears in different places is not convincing at all especially each places has their own government and leaders.
[1] https://freemanlaw.com/cryptocurrency/rwanda/
[2] https://www.coindesk.com/policy/2022/11/21/kenya-proposes-bill-to-tax-crypto/
I agree, as someone living in a third world country as well, too many opportunities are getting overlooked due to the poor living conditions in the country, add to this the negative preconceptions that they carried with them from their households, If they learn to get past that, I would bet my money that they'd make a killing here and in Africa, bitcoin mining or not.
As for crypto mining regulations, I do think the continent is not in the position to issue cease and desist orders in these mining entities/firms, especially if they help promote African Tourism and therefore jumpstart Africa's economy. The only thing that these people are a little wary of is the security, standard of living, and of course quality of basic human necessities.
Mining is still one of those industries that need a lot more time to gain traction, I suppose that if we give S.Africa more time to recuperate and build its own reputation, enough people will be able to realize the benefits of mining in Africa and therefore will come flocking towards the continent to make home of and mine not diamonds, but bitcoin this time.
Op I appreciate you for this statistics and the good information given to the world. Africa is a good continent to invest on mining business. We really needs mining experts to come and mine in Africa. Africa is also blessed with natural resources which can be used for the Mining plants. Some of such resources has been mentioned by the OP like, Seas, And Rivers, Waste, Crude oil and sun which can be used to to generate electricity.
In the area of mining, electricity is the major factor and the aspect of electricity has been tackle then every other things become secondary. Op once again thank you for this awareness.
It all comes down to money!
If things would have been that great for mining in Africa people would have moved there and not flocked to Texas or Canada or Russia or... the list goes on.
But yeah the first paragraph says it all, if you want to take a chuck of your profits and give it away, have a lower profit margin and you're interested more in the regional impact of your business, yeah, do it. But, you need the money to do that! And money ain't cheap!
A few things about :
LE:
The link you've posted shows Rwanda at 25 cents/kwh, it's completely the opposite, these are the most expensive, 25c/kwh is a no-go!
This would make the next paragraph I've written a bit inaccurate!
Rwanda consumes 527.30 million kWh a year, that's around 20k S19, so around 0.66% of the global hashrate in perfect optimization.
Just having cheap electricity doesn't mean they have the capacity to power any large operations without making others run out of power.
Not quoting everything since it look like a mess now with that change in c/kwh but look how you're giving the examples:
- cheap electricity: Rwanda (8th), Kenya (15th), South Africa (15th), and Nigeria
- security Mauritius is the 28th safest country in the world, Ghana is the 40th, Gambia 45th and Botswanan 48th.
Now if I were to look at what you mentioned before, Rwanda is 72, Kenya 120, RSA 118, and Nigeria 143.
You can't just go and pick each of the best ones whenever it suits you based on one factor, everyone would want cheap energy as in Norway and taxes as low as in Malta, but, you simply can't have them all.
That being said, probably a few of the African countries are far more attractive than the whole of Europe right now, to what level they can compete with the cheap power and infrastructure available in the US or Russia, that is a thing to be seen, although I wouldn't get my hopes that high for further decentralization of mining farms.
Given that mining profitability is very dependent on the cost of electricity. I just see about 4 countries you have mentioned. Africa has over 50 countries if I recall well, where are the rest? Or is mining going to happen in only 4 countries in the whole continent?
Solar energy makes much more sense as a backup option, but not running full-time. There might be a lot of Sunlight in the Sahara and Sub Saharan areas, but don't forget the unpredictable weather in the tropics. Importing solar equipment from Europe, the US or Asia might also be very expensive
Now, I doubt if there are any mining gear manufacturers based in Africa, so importing the mining will also likely double the cost of investment. We all know shipment fees and custom taxes can be very exorbitant
alas, ping times are directly related to the distance, Johannesburg is in South Africa, it's the furthest point in Africa from Europe, half of Africa is closer to the EU than the east part of U.S, EU is closer to the majority of African countries than to the western part of the U.S, a random example would be ping from Lagos to London, which averages below 100ms, a much better result than most other locations in respect to London.
I think there is people willing to mine on bitcoin there but it not just about cheap electricity although is be one of a lot of consideration too
Like internet speed, reliability of power and regulation on bitcoin mining oh also the source of electricity since some people believe bitcoin mine on dirty energy would be great if the energy comes from renewable source
One thing that really stood out to me is the friendly people of Africa. It's so important to have a welcoming and supportive community when setting up a business, and it sounds like African nations have a lot to offer in that regard.
I think it's great to consider all the factors when deciding where to mine Bitcoin, and Africa definitely seems like a promising option.
However, which of these have high quality high reliability data centres?
AWS only has Cape Town,
Azure only has Cape Town and Johannesburg,
Google only has Johannesburg,
Vultr only has Johannesburg
...
Very nice review, from what I've heard from people trying to start a mining operation in Africa mostly they were struggling with issues like high crime, political instability, corruption and unstable power supply. Africa has huge potential, but is not ready to host any significant mining farms at the moment. Please change my mind.
As far as the topic at hand is concerned, you don't need a data center to mine Bitcoin, many mining farms do exist in Africa, they face many issues but internet connection is not one of them.
Power infrastructure is the main concern, whatever Statista has to say about how cheap electricity is in Africa is pretty much far from accurate, power is cheap in most African countries because it's subsidized, and even the oil-rich countries don't own enough petroleum refineries, so the cost of electricity is pretty on the high end even for those countries, and since it's subsidized, it's pretty limited, many countries don't produce anything above 5000-10000MW worth of power, Africa as-is is a terrible place for any large mining operation.
Considering how the profitability in Bitcoin mining depends on running heavy equipment 24/7 and the probability of mining a valid block is decreasing with time and it's getting more difficult to earn much profit from mining, the very first thing for a Bitcoin mining firm is obviously having cheap and always available electricity supply.
African countries that you mentioned which made it in the list of cheap electricity-providing countries aren't close to the top 5 nations, so I wonder why would a mining firm choose a country positioned at number 8 or above instead of choosing one from the top.
Not only that but you also can not really use the heat for other purposes. If you own a warehouse in Siberia you can have a mining section somewhere in a corner and as a side effect your warehouse is heated for free. This will sadly not work in Africa and also cooling water etc will be more challenging.
I totally agree with OP. It's great to see how Bitcoin mining can make a positive impact on the standard of living in African communities. It's true that some African nations may not have all the ideal conditions for mining, but things are changing for the better. I think it's important to consider the humanitarian aspects of mining, not only economic, and strive for a positive impact on the communities in which mining operations are located.
Totally get what you're saying! Using the heat generated from mining to warm up a warehouse like in Siberia might not be as feasible in Africa. The hot temperatures there don't really lend themselves to that kind of setup. And yeah, cooling can be a challenge too, especially with water scarcity in some areas. But hey, there are still ways to repurpose the heat for things like hot water in hotels or hospitals, with some cool techniques like immersion cooling. After all, heat is just another form of energy that can be harnessed and converted into other forms of energy and used for various purposes. It's all about finding creative solutions and making the most of what's available, right?
Well said, the use of heat and the sun is crucial. It's possible to generate energy from heat, whether it's for making hot water to heat things like water in hotels or hospitals, as you mentioned, and/or we can use it to generate electricity with PV-panels.
If you create a good project to generate electricity using solar radiation, you could obtain free electricity to power another mining project with numerous cooling equipments and anything else you might need. It would be very interesting to mine in Africa imo.
It's hard to mine when it's 40-50 degrees Celsius outside. If only somewhere in the mountains, where it is not so hot.
A lot of electricity has to be spent on cooling, and building their own stations to generate electricity. Lots of extra costs.