Cryptocurrency on the River: Bitcoin Mining in Remote Zambia
By Joe Tidy, Cyber Correspondent, BBC World Service
Reporting from Zambia
In the heart of Zambia’s rugged northwestern bush, a unique interplay between nature and technology is unfolding. The Zambezi River rumbles nearby, its powerful current providing not just awe-inspiring sights but also a vital resource for a growing bitcoin mining operation. Here, amidst the remote landscape, a small but significant digital economy is taking root.
The Sound of Bitcoin
As the Zambezi cascades over rocks and rapids, an unexpected sound can be heard: the high-pitched whine of computer systems working diligently to verify bitcoin transactions. Phillip Walton, an engineer and representative of the mining company Gridless, excitedly exclaims, "It’s the sound of money!" as he surveys a makeshift bitcoin mine housed within a shipping container. This setup, featuring 120 computers, has been established specifically to process complex calculations linked to bitcoin mining.
Phillip explains the unique appeal of this remote site: the proximity to a hydro-electric power plant, which harnesses the Zambezi’s fierce current to produce clean and inexpensive electricity, essential for profitable bitcoin mining. "We recognized that in order to get better mining economics we needed to partner with the power company here and give them a revenue share," he states.
A Lifeline for the Local Community
The Zengamina hydro-power plant, operational since 2007, was established primarily to serve the local community and power essential facilities, such as a hospital. Despite this noble mission, the plant has faced challenges in generating enough revenue to cover operational costs due to low local demand. However, Gridless’s entry into the scene has proven to be transformative.
Daniel Rea, the British-Zambian manager of the hydro plant, acknowledges the major shift resulting from Gridless’s presence. "Every day we were wasting over half of the energy we could generate," he notes. With the bitcoin mine now accounting for approximately 30% of the plant’s revenue, the financial landscape has changed, allowing energy prices for the town to be kept down.
Impact on Daily Life
The relationship between the hydro-power facility and the bitcoin operation is having far-reaching effects in Zengamina, a small town comprising just a few dozen buildings. For local residents, the arrival of electricity has reshaped their lives significantly. Barber Damian expresses how electricity has "changed my life," enabling his shop to thrive as a social hub for the local youth where they can gather, enjoy music, and connect.
Sisters Lucy and Tumba Machayi, part of the younger generation, describe life before electricity: “It was basically just the bush.” Now, with the newfound power, they can charge their phones and stay connected, a luxury previously unavailable to them.
Looking Ahead: Challenges and Opportunities
Despite the booming presence of bitcoin mining, which has drawn little attention from locals, the situation may evolve as the hydro plant secures investments to expand its reach. Soon, the excess energy currently utilized by the bitcoin mine could be redirected to the national grid, potentially diminishing the profitability of bitcoin mining in the area. Phillip and his team remain optimistic; they view their time in Zengamina as a success, having established a profitable operation while also supporting the local community.
Gridless is already looking beyond Zengamina, having set up additional mining facilities in three other African nations. The company is also exploring ambitious plans to build hydro-electric plants from scratch, aiming to create more renewable energy sources that align with the goal of mining for bitcoin while providing electricity to underserved rural populations.
Navigating Controversy
While the innovative use of excess energy from renewable sources in bitcoin mining presents an appealing model, there are concerns regarding the sustainability and ethical implications of energy consumption within the industry. As communities continue to grow and demand for energy increases, the challenge remains to strike a balance between profitability and community needs.
Critics highlight incidents of energy strain in regions where bitcoin mining has proliferated, such as Kazakhstan, where mining activities increased energy usage significantly. Similar conflicts have emerged in the U.S., where regulations are being established to ensure that mining operations do not disrupt local electric grids.
“The consumer-driven energy model is essential for scalable, affordable, and sustainable energy access that meets the needs of African communities,” states Gridless co-founder Janet Maingi. However, resistance from authorities who view bitcoin mining as an excessive use of energy remains a hurdle the company is working to overcome.
Conclusion
In a landscape where nature and technology converge, the bitcoin mining operation at Zengamina hydro-power plant serves as a testament to the potential of renewable energy solutions. While the local community may not fully grasp the intricacies of cryptocurrency, the benefits of their partnership with Gridless are abundantly clear. Through the delicate balance of innovation and community-focused energy management, a brighter future is being forged in Zambia’s remote corners.
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