Ethiopia begins mining Bitcoin through new data mining partnership

The Ethiopian government plans to begin mining Bitcoin through a new partnership with Data Center Service, a subsidiary of West Data Group, according to the CEO of Ethiopia-based Hashlabs Mining. cal casa.

This partnership was announced on February 15 by Ethiopia Investment Holdings (EIH), Ethiopia’s sovereign wealth fund.

Under the collaboration, the sovereign wealth fund will invest $250 million to build “state-of-the-art infrastructure for data mining and artificial intelligence (AI) training operations in Ethiopia.”

Kassa said the deal involves setting up a Bitcoin mining operation using the Canaan Avalon miner and is part of the country’s broader strategy to leverage its technological and energy resources to attract international investment and boost economic growth.

However, the government has not yet officially confirmed the news. EIH did not respond to a request for comment at press time.

The news comes amid a surge in miner activity due to the halving, which is less than 65 days away and will result in a 50% reduction in mining rewards. Many miners have already begun expansion efforts to put them in suitable locations.

Changes in regulatory environment

The venture is not without challenges and controversies, especially related to the energy-intensive nature of Bitcoin mining.

There is ongoing debate about the impact of these operations on local electricity supplies. This is especially true in countries where energy access remains a pressing issue for large segments of the population.

Despite these concerns, the Ethiopian government’s move to regulate “crypto products,” including mining, reflects a cautious yet optimistic approach to embracing the potential economic benefits of Bitcoin mining.

The goal of this regulatory framework is to ensure that the growth of the sector does not come at the expense of the country’s energy security or environmental commitments.

The new regulations pave the way for mining companies to set up operations in the country. Recent media reports have shown a significant increase in the migration of Chinese miners to China as part of the BRICS movement.

chinese miner

In the past few months, there has been a noticeable influx of Chinese miners, driven by Ethiopia’s strategic plans and favorable conditions.

This trend is part of a larger movement of Bitcoin mining operations in China relocating as the country faces regulatory pressure at home and seeks cost-effective, regulation-friendly environments abroad.

Ethiopia’s low electricity costs, mainly due to the Grand Ethiopian Renaissance Dam, are a major lure for Chinese miners. These factors, combined with the Ethiopian government’s openness to technology investments and efforts to create a favorable environment for high-performance computing and data mining, have made Ethiopia an attractive destination for such work.

The dam’s role in providing affordable, renewable energy is consistent with miners’ requirements for a sustainable and economically viable power source for their energy-intensive operations.

The arrival of Chinese miners is underpinned by broader geopolitical and economic considerations. China’s growing involvement in Ethiopia, with significant investments across a variety of sectors, has built a solid foundation for these ventures.

Ethiopia’s strategic importance to China as a partner in Africa has further strengthened the relationship, providing Chinese companies with a friendly environment for business expansion, including in Bitcoin mining.