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65 sats \ 7 replies \ @KenyaCoin 4 Oct 2022 \ on: Can Bitcoin Mining Electrify Africa? - The Looking Glass Education bitcoin
There are so many use cases for mining bitcoin using stranded energy globally, but they are competing against each other and all bitcoin mining combined brings in only about $7 billion in annual revenue (at current exchange rate and 6.25 BTC per-block emission rate). And the next halving is coming around May, 2024 -- reducing the per-block emission rate to 3.125 BTC.
So unless bitcoin sees a dramatic spike in price (and thus, a spike in total revenues going to miners), there's not likely to going to be all that much new bitcoin mining coming online on the continent of Africa -- with some isolated exceptions (e.g., hydroelectric excess capacity, like what the GERD in Ethiopia will have as it continues its filling and its excess generation capacity can be utilized year-round).
But perhaps bitcoin has another role in bringing electricity production to where it is needed. Look at Helium's model for privatizing deployment of a global connectivity network, which now includes 5G mobile network service. In that model, an individual operator invests in the needed hardware which then provides a service sold to neighbors. Contrast that with the off-grid PAYGO rend-to-own model (PDF) where the consumer is saddled with an unaffordable debt contract for a solar panel kit.
But there could be an approach following the Helium model (minus the shitcoinery aspect of Helium) where a solar-powered off-grid microgrid operator (investing their own funds, or using outside investment) supplies solar power to neighbors (even if it is just low voltage direct current), who are paying in bitcoin (via LN) for their service. The payment in bitcoin is key where there is an outside investor as that helps to lessens the risk of revenue loss from a dishonest operator. Adding innovations like @andy's GRID, would permit this microgrid to operate with little involvement from the operator.
Distributed Charge - GRID
http://andyschroder.com/DistributedCharge/GRID/Overview
Eventually, if a grid connection becomes accessible in the area and as a result revenues to the microgrid drop off, this microgrid could then be decommissioned and relocated to another area where the grid does not yet reach (which lessens the risk of the capital expenditure investment by adding years to its potential productive lifespan).
Additionally, electricity is not the only "infrastructure" service missing from the picture. This operator might host a water kiosk as well. And there's even internet connectivity, using Helium's service even, if there's no LN-related alternative. There's a number of service needs the typical operator might be able to provide service for.
Solar electric generation and microgrids aren't my areas of expertise but I wanted to share this here so that, if nothing else, there's a place where those with any interest or opinions can congregate and discuss.
Thank you so much for the feedback, much appreciated. I agree that Bitcoin price plays a major role in making the mining play successful and that competition is going to heat up as the halvings occur with more hashpower on the network. However I am of the opinion that as block rewards decrease transaction fees will fill the gap as the network scales, so that’s also something to consider when we analyse potential mining revenue. Secondly my angle was looking at funding infrastructure projects for electricity generation from a governmental level, as opposed to IMF/WB loans that come with strings attached, which is why I highlighted that Bitcoin bonds could be a starting point to do this, a hybrid solution. Having said that I am not denying or discounting the idea of a community grassroots approach which you suggested to doing this which would definitely work if executed right. Lastly this approach can be implemented first at micro grid level as a proof of concept and instead of huge power plants, we could have multiple smaller micro-grids that are Bitcoin powered so to speak. Have a look at this https://africansignals.substack.com/p/21st-century-villages I like the helium idea it’s a bit complex to implement in this scenario but it’s worth giving a thought to and thank you for the link you shared I will have a look at it. I will do a follow up to this article soon, based on some of the feedback I am getting 😀
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[...] instead of huge power plants, we could have multiple smaller micro-grids that are Bitcoin powered so to speak. Have a look at this https://africansignals.substack.com/p/21st-century-villages
I created a separate post for that newsletter issue:
21st Century Villages
#77472
https://africansignals.substack.com/p/21st-century-villages
Putting six mining machines to work using 20kW on a 100kW site is financially workable for a mini-grid
This is where the details, such as the source of the power, becomes crucial in weighing whether or not bitcoin mining would be able to contribute positively. If it is solar-powered, does the equipment get powered down when sunset approaches? Even if there is battery storage, that likely won't mean enough power is stored to support running bitcoin mining through the entire night until the sunlight in the morning is enough to solely support the load once again. If a bitcoin miner is running just 40% of the day, that's wasted opportunity as the rig is depreciating at a good clip (as bitcoin mining rigs do, historically, quickly lose value due to improvements in hashrate capacity and power efficiency with new models). Even the author's run-of-the-river microgrid example would likely be seasonal, or periods where it cannot produce sufficiently due to drought.
That being said, there is much to gain from this concept. If the bitcoin exchange rate rises faster than the bitcoin mining difficulty, these rigs literally print money, and not just are these able to pay for the power consumed but they can generate a very nice outsized return on investment. But even if there's no price spike, ... there are knock-on effects possible as well. These rigs produce heat -- heat which can be useful ... such as in agriculture, such as heating a greenhouse, or drying grains, perhaps. These rigs require some amount of technical skills to install and operate, and such a project would help young technicians further develop their skills in new ways. And finally, this bitcoin mining as "buyer of last resort" option may, in some instances, be just the component needed that tips the scale in favor of going forward with a microgrid project.
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You hit the nail on the head there, and yes the details are important in assessing overall long-term feasibility and sustainability, However i believe this is a very viable opportunity that is staring Africa in the face, especially when you consider the limitations that energy poverty impose on economic growth. Plus the grid operators don't necessarily need to buy all the rigs upfront, they could entice a bitcoin miner to come and purchase power at the source, once consumers are connected the miner can turn off his machines when required to balance the power consumption between consumers and the miner. in addition, the point you brought up about heat energy being recycled for agricultural use is another benefit, and this is exactly what i am talking about that this is definitely a route that if planned and executed well, there is little to lose and much to gain, especially when new projects in rural areas are on the cards where immediate industrialization may not be likely, but a vibrant agricultural community already exists.
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Where does discussion on this topic occur?
I'm aware of this Telegram group,
Sustainable bitcoin mining
https://t.me/renewablebitcoin
but I'm looking to become more informed more in-general for micro-grids.
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I had no idea Erik Hersman had a newsletter, and thus hadn't seen that specific issue either. I've owned and used the original BRCK, and follow their endeavors, so that's really weird that I hadn't known of the newsletter. Thank you so much for sharing that!
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Another POC worth checking out http://afsiasolar.com/green-bitcoin-mining-a-game-changer-for-mini-grids-in-africa/
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I created a separate post for that article as well:
Green Bitcoin Mining: A game changer for mini-grids in Africa?
#78008
http://afsiasolar.com/green-bitcoin-mining-a-game-changer-for-mini-grids-in-africa
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