Outcast Chinese Bitcoin miners are now turning their attention to Africa, particularly Ethiopia, drawn by the promise of inexpensive electricity.

Outcast Chinese Bitcoin miners are now turning their attention to Africa, particularly Ethiopia, drawn by the promise of inexpensive electricity. The shift is fueled by Ethiopia’s Grand Ethiopian Renaissance Dam, which offers some of the world’s lowest electricity costs.

With Ethiopia’s favorable electricity rates and a government increasingly receptive to Bitcoin mining, the country is becoming a desirable destination for Chinese mining companies. Ethan Vera, COO at Luxor Technology, highlighted Ethiopia’s appeal, stating, “Ethiopia offers a unique combination of affordable power and a government that is welcoming Bitcoin mining.” Yet, this move comes with challenges. As of 2016, over half of Ethiopia lacked access to electricity.

Although the situation is gradually improving, nearly half of the population still lives without power, posing a delicate balance between supporting the burgeoning mining sector and meeting domestic energy needs. This trend mirrors Kazakhstan’s experience following China’s 2021 ban on Bitcoin mining. Initially, Kazakhstan saw an influx of miners attracted by its proximity to China, ample energy resources, and favorable regulations.

However, rapid industry growth led to power shortages and regulatory hurdles, resulting in a significant downturn. As Chinese miners navigate the complexities of establishing operations in Ethiopia, they find themselves in a geopolitically advantageous position. China’s significant investment in Ethiopia and the country’s reliance on foreign currency inflows set the stage for a potentially symbiotic relationship.

However, the global Bitcoin mining landscape is evolving, influenced by geopolitical shifts, environmental concerns, and the pursuit of sustainable energy sources. Lessons from Kazakhstan’s experience underscore the importance of a cautious approach that balances industry growth with broader economic and environmental considerations.