Ethiopia has approached Data Center Service, a subsidiary of Hong Kong-based West Data, about a $250 million data mining infrastructure project.
The data centers provide the infrastructure that enables large-scale Bitcoin mining. The East African country’s latest move is to relocate a number of Chinese cryptocurrency mining companies following widespread attacks on cryptocurrencies by the Chinese government in 2021.
Unlike both governments, Hong Kong, a semi-autonomous region of China, has been more open to cryptocurrencies. Yesterday, Ethiopian Investment Holdings announced the deal on LinkedIn, but according to Reuters , details of the counterparty or the value of the transaction were subsequently removed from the account.
Although cryptocurrency trading is still banned, Ethiopia began accepting miners in 2022. Operations starting there can take advantage of lower energy costs, which may be more attractive due to Bitcoin’s upcoming halving on April 19.
The event, known as halving, takes place every four years and is predetermined in Bitcoin’s code when the rewards given to Bitcoin miners will be halved. In order to remain viable, this requires significant funding to upgrade and expand mining systems. As a result, the global supply squeeze is affecting the price of Bitcoin.
As a result of the abundance of hydropower and other renewable energy sources, as well as friendly government policies, many miners see Ethiopia as an attractive place to do business.
Recently, Ethiopia’s Great Renaissance Dam increased the country’s power output to 5.3 gigawatts, 92% of which comes from hydroelectric sources.
Last week, a senior executive at Bitmain, the world’s largest mining equipment supplier, told Bloomberg that with a number of power generation infrastructure projects, Ethiopia could soon match Texas‘ generating capacity.
Texas is the world leader in Bitcoin mining operations, accounting for 28.5% of the US hash rate, which determines the total computing power devoted to Bitcoin mining worldwide. The United States accounts for about 40% of the world’s hashrate ratio.
