July 16, 2024
Latest Cryptocurrency News

Ethiopia Partners with Hong Kong for Data Mining Project

In a significant move toward becoming a hub for cryptocurrency mining, Ethiopia has signed a memorandum of understanding with Data Centre Service, a subsidiary of Hong Kong’s West Data, to initiate a $250 million data mining infrastructure project in the country.

This strategic collaboration comes in the wake of the 2021 crypto crackdown in China, prompting many Chinese crypto mining operations to seek refuge in other nations. Ethiopia, with its welcoming government policies and cost-effective energy resources, has emerged as an attractive destination for such ventures.

The Ethiopian Investment Holdings officially announced the deal on LinkedIn, though details regarding the deal’s value and the counterparty were later deleted from the account, as reported by Reuters.

Apart from fostering cryptocurrency mining, the partnership also aims to promote artificial intelligence (AI) training throughout Ethiopia. While cryptocurrency trading remains prohibited in the country, the influx of mining operations has been encouraged since 2022.

Ethiopia’s appeal to miners lies in its reduced energy costs, driven by an abundance of hydroelectric power and other renewable energy sources. The Grand Ethiopian Renaissance Dam, which recently increased the country’s generation capacity to 5.3 gigawatts, plays a pivotal role in this energy landscape, with 92% of the capacity coming from hydroelectric sources.

The impending Bitcoin halving scheduled for April 19 is adding urgency to the establishment of mining operations in Ethiopia. Bitcoin halving occurs every four years, cutting miners’ Bitcoin rewards in half. This event historically prompts major mining operations to upgrade and expand, causing a global supply squeeze that often drives up the price of Bitcoin.

In a recent statement to Bloomberg, a senior executive at Bitmain, a leading global supplier of mining hardware, suggested that Ethiopia could rival Texas’ generation capacity in a few years. Texas currently leads the world in Bitcoin mining operations, contributing 28.5% to the US’s hash rate, a metric indicating the total computing power devoted to Bitcoin mining globally. The United States itself accounts for approximately 40% of the global hash rate. With various electricity generation infrastructure projects underway, Ethiopia is positioning itself as a promising player in the evolving landscape of cryptocurrency mining.

Image by Pete Linforth from Pixabay

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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