Ethiopia is becoming a significant Bitcoin mining center, leveraging its vast hydroelectric resources and low electricity costs. As of October 10, 2024, local miners are consuming approximately 600 megawatts (MW) of power, with expectations for further capacity to come online soon.
The Ethiopian government has initiated measures to foster a favorable environment for Bitcoin mining, including a recent $250 million partnership with West Data Group to enhance digital infrastructure. This strategic shift follows China's cryptocurrency mining ban, prompting miners to seek operations in more accommodating regions.
With electricity priced around 3.14 cents per kilowatt-hour, Ethiopia is attractive for miners using mid-generation hardware like Bitmain's S19J Pro. The country's cooler climate also minimizes the need for costly cooling systems.
Analysts estimate that Bitcoin mining could contribute between $2 billion to $4 billion to Ethiopia's economy. However, challenges persist, as about half of the population still lacks access to electricity, raising concerns about balancing miners' needs with those of the public.
The government is developing legislation to clarify Bitcoin operations, potentially alleviating some challenges faced by miners. Yet, the regulatory landscape remains uncertain, with potential shifts that could impact the industry's future.
As Ethiopia seeks to attract international investment, it must ensure adequate energy supply for its citizens while continuing to enhance its infrastructure, particularly through initiatives like the Grand Ethiopian Renaissance Dam.