Original title: "Chinese Bitcoin Miners Find a New Crypto Haven in Ethiopia"
Written by: David Pan, Fasika Tadesse, Bloomberg Compiled by: Carl, Techub News
Article source: Techub News Click to view more
Last spring, shipping containers began to appear near the substation connected to the Grand Ethiopian Renaissance Dam, the largest in Africa. Inside the containers were many high-power, energy-intensive Bitcoin mining machines. This suggests that Chinese Bitcoin miners, who have been traveling from country to country in search of cheap electricity and friendly regulations since being expelled more than two years ago, have now arrived in Africa. Buffed by political and economic retrogrades, China’s Bitcoin miners are attracted by the country’s low electricity costs and a government friendly to the cryptocurrency industry. Ethiopia, which will allow Bitcoin mining starting in 2022, although it still bans cryptocurrency trading, has strengthened ties with China over the past decade, with several Chinese companies helping it build a $4.8 billion dam that miners Plan to get electricity from it.
giant dams in ethiopia
Ethiopia has become a unique opportunity for all companies involved in cryptocurrency mining, as climate change and electricity scarcity have led to a backlash against cryptocurrency mining elsewhere. Ethiopia holds special appeal for Chinese companies, which once dominated Bitcoin mining but now struggle to compete with their current Texas-based rivals.
In 2021, the Chinese government banned Bitcoin mining, China's status as a Bitcoin mining center came to an abrupt end, and dozens of companies were forced to leave. It’s also a risky gamble for these companies and Ethiopia. A series of developing countries, such as Kazakhstan and Iran, initially embraced Bitcoin mining but began to pivot when its energy use threatened to spark domestic dissatisfaction. Jaran Mellerud, CEO of Hashlabs Mining, said: “First, countries may run out of available power, leaving miners with no room to expand. Second, miners may suddenly be deemed unwelcome by governments and forced to leave.”
Nuo Xu, founder of the China Digital Mining Association, said it is this temptation that has led some Chinese companies to start operating without waiting for official approval. “Miners disguise themselves as factories or agricultural companies to obtain electricity rather than seek government approval to mine.” Yodahe did not respond to a request for comment on such practices. Chinese miners' confidence is underpinned by geopolitics. China is Ethiopia’s largest source of foreign direct investment and its largest bilateral creditor. Ethiopia's finance ministry said in December that the Chinese government and financial institutions provided nearly $15 billion in loans to 70 large projects in the country from 2006 to 2018.
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