Could Bitcoin be new hope for Africa? It could be, despite the possible environmental impact and what its detractors have to say about it. The Kenyan government, however, has decided to ignore those possibilities and instead focus on the potential returns of mining Bitcoin.
The very mining that has been banned in New York and that is instead thriving in many other places around the world. Kenya intends to join the list of countries adopting crypto and become Africa’s first crypto hub by inviting Bitcoin mining companies to use its excess geothermal energy for their operations.
This change is unfolding right at the heart of Africa, near Nairobi, where several companies engaged in Bitcoin mining have already approached the country’s largest power generation company – KenGen. The season for this is quite simple, as KenGen is the largest producer of geothermal energy in Africa, meaning that any crypto mining activities could benefit from renewable and potentially cheap electricity to power than operations
Peketsa Mwangi, the acting director of geothermal development at KenGen, says his company is eager to welcome these miners to Kenya:
“We’ll have them here because we have the space and the power is near, which helps with stability.”
Miners always move in search of cheap energy. This energy, in most cases, is produced from renewable sources, and miners are willing to take their operations almost anywhere with cheaper energy and political stability. This is what could happen soon in Kenya with the direct involvement of KenGen—the leading electric power generation company in the country, producing about 75 percent of electricity—which has significant amounts of geothermal energy available.
The plan would be similar to El Salvador’s, but easier to implement: bring miners to the vicinity of the main geothermal power plant, near Olkaria, just over 100 kilometers from the capital.
This would bring tremendous benefits to the country, which could use surplus energy, make the network more efficient, and potentially even create a local pool of mining experts to be employed in well-paying, major wealth-creating jobs.
According to Cambridge’s Bitcoin Electricity Consumption Index (CBECI), there are no Bitcoin mining operations in the eastern African nation, but the region appears perfect for miners due to its estimated geothermal energy potential of 10,000 Megawatts (MW).
Taxes and fees collected from miners could also yield greater revenue for the Kenyan government. In comparison, Kazakhstan is expected to earn $1.5 billion in revenue from mining over the next 5 years, a huge increase compared to the $1.5 million in Q1 2022.
There are several developing and emerging countries that are getting into Bitcoin while many of the more developed countries continue to lag behind in that aspect, which does beg the question of whether the ongoing struggle with mining operations and crypto as a whole risk being counterproductive. Like New York, for example, which recently reiterated its hostility to mining, as well as many other centers of interest that continue to wage similar battles against crypto.
Regardless of the issue, Kenya will do it differently: it aims to use its surplus for the benefit of the miners and they will share in it part of their profits earned to keep the Bitcoin network secure. All of this is done, of course, through voluntary cooperation, encouraging both the production of renewable energy while also promoting green crypto mining.