China’s bitcoin miners line up for Ethiopia thanks to cheap energy, lax crypto regulations
Cryptocurrency mining, which consumers a lot of electricity and is very damaging to the environment, is heavily regulated in China. However, Chinese miners, once the best and with the largest pool in the world before American miners came into the scene, are now moving to Ethiopia
Cryptocurrency miners in China are moving to greener pastures as the CCP continues to crack down on Bitcoin and other cryptocurrencies, in a bid to regulate the crypto market heavily. The country where they are setting up their new base? Ethiopia.
Recently, large cargo containers have been spotted near the Grand Ethiopian Renaissance Dam (GERD), signalling a new development in Africa’s energy landscape. These containers house powerful computers, marking the arrival of Chinese Bitcoin miners in the region, as per a report by the South China Morning Post.
Driven by the quest for affordable electricity and favourable regulations after being ousted from China, these miners have found Ethiopia appealing due to its low electricity costs and welcoming government stance, despite a ban on cryptocurrency trading.
Ethiopia’s emergence as a hub for crypto mining reflects a global trend amidst concerns over climate change and energy scarcity, and just how damaging mining any cryptocurrency, especially Bitcoin can be. For starters, trading crypto, is banned in the country, although its laws and taxation policies, make it a haven for miners.
Despite its challenges, Ethiopia offers a promising opportunity for mining firms, particularly Chinese companies struggling to compete in places like Texas.
The entry of Bitcoin miners into Ethiopia is not without risks. The volatile nature of the crypto industry, coupled with political and economic uncertainties, poses challenges for both companies and the host nation.
While Ethiopian officials remain cautious about the implications of crypto mining, the sector presents potential economic benefits, especially in terms of foreign exchange earnings.
The influx of mining equipment into Ethiopia underscores the country’s growing importance in the crypto mining landscape, with Chinese miners dominating the scene.
However, concerns persist about the environmental impact of crypto mining, particularly its energy consumption, and the potential strain it could put on Ethiopia’s power supply.
Despite these challenges, Ethiopian authorities have permitted crypto mining, primarily due to the revenue generated through foreign currency payments for electricity.
While regulations are being developed to govern the sector, uncertainties remain among miners about long-term oversight and compliance.
Nevertheless, Ethiopia presents a unique opportunity for bitcoin miners, offering a blend of economic incentives and political stability, positioning the country as a potential rival to established hubs like Texas in the global bitcoin mining industry.
(With inputs from agencies)
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Published on: February 08, 2024 16:00:45 IST
