Bitcoin Mining Pushes The Faster Expansion of Africa's Electricity Grid
Africa’s population of $1.2 Billion is currently underserved by an insufficient, inefficient electric grid.
Only about 40% of this population has access to reliable electricity, the remaining portion often having to rely on traditional methods for their energy needs.
Given that even the 40% with access aren’t always able to afford it, we need new players to help spread the existing grid further out, while also helping to utilize the existing energy production sustainably.
It’s nearly impossible to run a 21st-century economy without access to electric (and Internet) connectivity.
This is why Gridless, and similar companies, have developed across the continent, not only mining Bitcoin but also backstopping mini-grid electricity providers.
Bitcoin Adoption In Africa
Perhaps more than anywhere else on the globe, Africa needs Bitcoin (BTC) for cross-border payments and remittances, in full consideration that the majority (55%) of the population remains unbanked.
Besides, as the Dollar and Euro devaluations continue overseas, it is African populations that are the hardest hit by the trickle-down effects on third-order African currencies.
That said, asking people to put their savings into a highly volatile Bitcoin (BTC) asset is an uncomfortable proposition to most Africans. The most valuable use case remains using BTC as a means of exchange rather than a store of savings.
Taking Bitcoin as a Base Layer and the Lightning Network as the Transmission Layer, there’s still perhaps a 3rd Layer that needs building on top of that without any cost friction which then becomes crucial for future BTC uptake and adoption across the continent.
The biggest hindrances to BTC adoption are on-ramps and off-ramps, even assuming that one can get people to believe in Bitcoin. Most parts of Africa currently don’t have very good options for holding and securing BTC making it difficult for people to accrue BTC.
Users, therefore, end up transacting via the Lightning Network and immediately reverting back to local currency.
Gridless’ Win-Win-Win Market Fit
Gridless’ real benefit lies in finding mini-grid providers operating in places yet to be connected to the main grid. This will often be solar, hydro, geothermal, and wind energy projects generating between 1-2 MW of power.
Low usage periods during the day often result in a lot of stranded energy, which instead of dissipating as wasted heat, is instead used to run Bitcoin Miners, while paying the mini-grid energy provider for the energy used.
Not only does this use energy more efficiently, but it also offers the mini-grid provider a sustainable business model.
Buying up the stranded energy that would otherwise waste out as heat gives the mini-grid provide 3-5 times the money they’d make, benefits which can be passed on to the end-user in the form of reduced electricity costs, especially in combination with corresponding economies of scale.
This quickly becomes a Win-Win-Win situation;
Gridless gets to mine BTC and help secure the Bitcoin network
The mini-grid provider operates sustainably by selling excessive energy, to an anchor tenant, that would otherwise be wasted
The community gets more, cheaper power
Conclusion
A vibrant BTC mining space is likely to sprout in Africa as mining software further develops to attempt to speak to say turbine-manning software and further diligent attempts at remote base-load management and auto-curtailing.
Exactly because it currently has a vastly underdeveloped grid, Africa might just be the next big global BTC mining hub - investors can close deals here that would be nearly impossible to execute in places with way more developed grids.
We need more BTC mining activity on the continent to catalyze its greater, faster electrification, simultaneously distributing the Bitcoin network’s hash rate further across Africa, in the process helping timestamp and secure BTC transactions across the world.