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No Power Grid? This African Village Mines Bitcoin for Electricityby@antagonist
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No Power Grid? This African Village Mines Bitcoin for Electricity

by Aremu Adams AdebisiJanuary 31st, 2024
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African village Bondo built a micro-hydro grid to mine Bitcoin and power 1,800 homes. Earns enough from crypto mining to sustain the system. Most efforts at electrification in Africa have struggled. But Bondo self-financed access through Bitcoin mining innovation. Bondo's micropower grid avoids costs/issues with national grids and utilities. Uses renewable micro-hydro energy. Provides affordable, pay-as-you-go electricity. Scaling these off-grid solutions is difficult. Requires expertise, funding, policy support. But holds great potential for rural development. Other projects also using crypto to drive decentralized electrification - allowing people to buy/sell solar power with Bitcoin. Crypto mining enables self-reliant progress. Taps abundant renewables rather than aid. Could inspire cities struggling with blackouts too. The key is starting small, focused on communal needs. Then blockchain technology can strategically empower the energy poor with new possibilities.
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Across Africa, over 600 million people live without electricity. If you deep it, that's nearly half the entire population sitting in the dark. Even in places with power access, month-long blackouts are common.


African countries without access to electricity. Source: IEA Energy Outlook


In the much smaller country of Malawi, only 11% of citizens have access to the grid. And most of those lucky few live clustered in cities, not scattered across rural areas.

But One Village Defies the Odds — Bondo

Nestled on the slopes of Mount Mulanje, Bondo is a small village that used to live in the dark. For years, it had no hope of getting connected to the national grid.


A display of Bondo’s micro-hydro scheme. Source: MECS


But things changed when Gridless — a Kenyan company that designs, builds, and operates Bitcoin mining sites — installed a micro-hydro mini-grid in the village. The mini-grid harnesses the power of water to generate electricity, which is then used to mine Bitcoin.


By mining Bitcoin, Gridless not only earns income to sustain the mini-grid but also provides affordable electricity to over 1,800 homes in Bondo. Erik Hersman, the CEO of Gridless, said: "We are not just mining Bitcoin, we are mining hope."


Employees from Gridless. Source: Niceredov


The electricity has brought many benefits to the villagers. They can now use light bulbs, fridges, TVs, and phones in their homes. They can also start businesses, preserve food, store medicine, and study at night.


The women in Bondo are particularly pleased with the development. They told Ian Birrell, the journalist who first reported about the story, that:


"Before, our husbands would lie about going to watch football when they were cheating on us. But now with TVs in our homes, they can't use that excuse anymore!”

Truly, Africans Can't Use “No Electricity” As an Excuse Anymore

Crypto and blockchain adoption is on the rise across Africa. Nigeria has the highest crypto ownership rate in the world, with 47% of its population having used or owned crypto.


Share of respondents owned or used crypto in 56 countries. Source: Statista


Kenya, Ghana, and South Africa also rank among the top countries for crypto adoption. Overall, Africa accounts for over $90 billion in cryptocurrency transactions every year.


Yet despite this growth, most activity remains concentrated in urban areas, confined to speculative trading rather than real-world usage. And while Bitcoin mining has reached 54.5% sustainable energy usage globally, stories showcasing this development remain rare in Africa.


Bitcoin mining hit 54.5%. Source: Woobull


Efforts to expand electrification in Africa have often struggled, as new technologies feel too risky and communities lack the infrastructure to benefit from them. Some blame poor leadership, but the root cause is the systemic underutilization of the continent’s abundant energy resources.


Consider these facts:

  • Africa has almost unlimited solar potential, estimated at 11 terawatts, but only a fraction of it is used.


  • It has abundant hydro resources, estimated at 350 gigawatts, but only 5-6% of them are exploited.


  • It has over 100 gigawatts of wind potential, but only 2% of it is utilized.


In addition to these untapped resources, the continent boasts a strong human capital, with technical and entrepreneurial talent. African startups raised $5 billion in 2022, a record high. As Malado Kaba, former finance minister of Guinea, put it:


"Africa has all the ingredients for an economic breakthrough if it can activate its raw potential."


By cleverly tapping into Bitcoin's promise, the village of Bondo has written a script that other African nations can follow. And in doing so, it just might have established a paradox too:

How Can an Isolated Village Finance Electricity Access in Ways Even Major Cities Cannot Yet Deliver?

The answer lies in innovation - powering a microgrid through Bitcoin mining.


Cryptocurrency mining is hugely energy intensive, with Bitcoin alone consuming around 143 terawatt-hours (TWh) every year - more than the annual consumption of many countries. This intensity stems from Bitcoin's complex Proof of Work (PoW) system.


Bitcoin electricity compared with others. Source: Statista


In contrast, Sub-Saharan Africa's per capita energy consumption stands at just 180 kWh. Currently, Africa's total electricity demand is 700 TWh, with North African economies and South Africa accounting for over 70%.


Mining Bitcoin requires a voracious appetite for energy. The average Bitcoin miner generates 1,173 kilowatt-hours per transaction, enough to power a typical American household for six weeks. Yet, despite this demand, major African cities still struggle to meet needs.


South Africa experiences frequent power outages despite having the most electrified grid in Africa. Nigeria's large gas reserves fail to provide stable electricity for its 200 million citizens. Short-term solutions like generators often fail due to high costs.


Remarkably, rural villages like Bondo in Malawi have self-financed electricity access in ways megacities cannot. Companies like Gridless have sustainably electrified homes by tapping into Bitcoin mining revenues. The miners secure blockchains while earning enough to maintain village micro-grids.


These projects show the benefits of decentralized off-grid solutions for rural electrification. They avoid the high costs and inefficiencies of extending national grids. They also prevent the instability and corruption of state-owned utilities.


They use renewable energy sources like micro-hydro, which have less environmental impact than large dams or diesel. And they enable 24/7 mining, which allows for flexible and affordable pay-as-you-go pricing.

But Scaling Them Remains Difficult

Easier to say what happened in Bondo can happen anywhere else, but the truth is that scaling is difficult.


Many villages lack the technical expertise and funding to set up and maintain such systems, while investors are wary of the risks and uncertainties in rural areas. These challenges require the involvement of NGOs, who can help with community education, project development, and capital mobilization.


Gridless echoes the need for collaborative approaches to scale these solutions. Eric Hersman was quoted as saying:


"We believe that Bitcoin mining can be a catalyst for energy access, but it needs to be done in a way that is respectful of the environment, the culture, and the laws of each country."


Beyond Bondo, there are other projects that use digital currencies to drive innovation. In South Africa, Sun Exchange has solar microgrids that allow people to buy and sell solar power using Bitcoin. In Kenya, Powerhive and BitLumens enable pre-paid power meters that accept mobile money and cryptocurrencies. These projects decentralize energy access and empower local communities.


One of Powerhive’s projects. Source: Powerhive


Using cryptocurrencies for rural electrification means innovators can also provide banking services and clean energy to the unbanked. However, some regulators have banned or restricted crypto mining, citing environmental and security concerns. These policies ignore the potential benefits of crypto mining for energy access and development and create obstacles to scaling these solutions.


For remote villages, crypto mining enables self-reliant development. By using renewable energy sources and digital currencies, they can improve their living standards and economic opportunities, without depending on external aid.


Such innovation could also inspire major cities struggling with blackouts and pollution.

The Key to Sustainable Adoption of Bitcoin Mining Is in Starting Small

Blockchain mining typically means warehouses full of specialized computers consuming vast amounts of electricity. Yet, in off-grid African villages, we find an overlooked opportunity: blockchain technology strategically empowering energy-poor communities.


Starting small and local is key to unlocking blockchain's full potential. Too often, innovation targets the ecosystems with the greatest preexisting resources and demand - cities and governments. But the real test comes when expanding access and opportunity to those with the greatest marginalization and need.


Companies like Gridless embody this approach. Rather than building urban-first, they establish village-level renewable microgrids able to sustainably mine crypto. This simultaneously earns them income while powering local homes with affordable, off-grid electricity.


The community-governed approach offers several benefits:


  • Financial tools for the unbanked through crypto
  • New business opportunities and jobs for entrepreneurs
  • Funding for local health and conservation efforts


Most critically, it gives people direct agency rather than relying on centralized authorities. Locals can now self-finance and self-operate the energy infrastructure uplifting their standards of living on their own terms.


Scaling this promise requires collaboration. Governments can pilot projects and develop crypt-friendly policy environments. Investors like GoMining can participate through sustainable funding models benefitting both communities and shareholders. But at the core, solutions must be co-designed alongside locals rather than imposed top-down by outsiders.


The future looks hard, but signs of hope exist even in darkness. When focused on human needs, blockchains can empower people to uplift themselves. And "starting small" turns sparks into flames.


So, while mining may conjure images of warehouses and megawatts, its most pioneering edge may sprout from the overlooked soil of villages. For here, people are positioned to shape their own decentralized energy futures.


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