- Bitcoin mining has come under fire in recent years due to the environmental impact of the practice.
- While mining is essential to the value creation of Bitcoin and other cryptocurrencies, recent estimates have shown that Bitcoin mining uses a whopping 0.38% of global electricity use.
This has caused many to disparage the use of Bitcoin, amongst its most notable detractors being Elon Musk, who announced that Tesla would no long be accepting Bitcoin in payment due to the heavy environmental impact of Bitcoin mining on the proof-of-work system.
Now, leading green energy distributors, primarily located in Africa, have posited a solution to the problem of Bitcoin mining, namely the use of power to create a sustainable energy source for this widespread practice.
The African green energy solution
Some in the West may not give Africa much of a second thought when they think of innovation hubs for blockchain technology, but a closer look at the continent reveals a completely different picture.
While the African blockchain ecosystem isn’t without its challenges, rising internet penetration and progress in computer science indicate it is clearly gaining clout.
According to SA Shares, mining cryptocurrencies represents a significant advancement for many, as it provides a valuable source of potential wealth creation for much of the disenfranchised, though tech-savvy, African youth.
However, it’s unclear how sustainable bitcoin mining may be in Africa, given that it uses more energy than all but three African countries combined (South Africa, Egypt, and Algeria). However, bitcoin mining in Africa may be given a boost by switching to solar power.
While each African nation faces unique challenges and opportunities, solar energy is quickly becoming a practical answer in a growing number of countries. Several ongoing solar energy projects attest to this trend.
If executed on a large enough scale, this investment in alternative energy infrastructure might help make bitcoin mining in Africa a more sustainable effort, which could advance Africa’s industry.
How solar can drive Bitcoin mining in Africa
Bitcoin mining powered by solar energy has the potential to boost the economy of many African countries and provide increased economic opportunity for a broader cross-section of the continent.
Bitcoin mining is providing a means of economic advancement for many people in Africa who might otherwise be hampered by hyperinflationary currency or local tenders affected by government instability.
Incorporating solar energy into the mix can make this a long-term improvement for people and economies.
After all, there is an urgent demand for it in some regions of Africa. Bitcoin mining’s energy needs are global unsustainable. Solar power has the potential to solve the issue of limited access to electricity in Africa, while simultaneously reducing the impact of Bitcoin mining.
Solar powered mining can be more profitable
Bitcoin mining is one way to generate substantial income, and potentially much more income than under standard power sales contracts to the grid.
The price of power is the single most important element in determining whether or not Bitcoin mining is profitable. In this case, it may make sense to integrate on-site solar electricity with mining activities if solar power is less expensive than purchasing power from the grid.
Bitcoin mining enterprises that use solar energy can be extremely successful, with payback periods of only a year or two possible.
After that, solar farms can continue to profit from Bitcoin with essentially minimal ongoing costs for the following 25 years or more, however the mining hardware will eventually need to be upgraded.
To conclude, solar mining enterprises can be made more profitable by taking advantage of opportunities to purchase extremely cheap grid power, or even negatively-priced power.
Author: Bryan Groenendaal