Ethiopia attracts Chinese companies for cryptocurrency mining due to its inexpensive electricity and lawful mining environment.
Due to the low cost of power, Chinese corporations are relocating their cryptocurrency mining operations to Ethiopia. In 2021, when China prohibited crypto activity, these businesses sought other markets. Ethiopia approved Bitcoin mining in 2022, despite the country’s ban on cryptocurrency trade. For this reason, Chinese mining corporations found Ethiopia to be an ideal location to set up shop.
The majority of Ethiopia’s power contracts are with Chinese firms, according to a Bloomberg investigation. Since water power accounts for 92% of Ethiopia’s electrical generation, they appreciate it since it’s cheap and reliable. It is more expensive to keep mining equipment cool in hotter regions, such as Texas, USA, whereas Ethiopia offers milder temperatures.
However, there are a few issues. To avoid getting the legal OK for Bitcoin mining, some businesses utilize power by pretending to be farms or industries. Proceed with caution. The government unexpectedly ceased mining activities in other nations, such as Kazakhstan and Iran. Putting capital into Ethiopia is dangerous because everything might change in an instant.
The study goes on to say that water power isn’t just used for mining in Africa; it’s also aiding parks and local residents. Ethiopia is an attractive destination for Chinese cryptocurrency mining companies due to its affordable and high-quality electricity. However, they should exercise caution in light of the fact that the nation may undergo changes.