Hell’s Gate, Kenya — 2.5 hours northwest of Nairobi by car, small group Bitcoin Miners have set up shop on the site of an extinct volcano near Hell’s Gate National Park.
Tucked away on the shores of Lake Naivasha, the mine is run by a startup called Gridless and consists of a single 500-kilowatt mobile container that looks like a small residential trailer from the outside. .
With support from Jack Dorsey block, Gridless uses a combination of solar power and stranded, wasted energy from nearby geothermal power plants to power its machines. This is one of six mines the company operates in Kenya, Malawi, and Zambia, powered by a combination of renewable energy and addressing its broader mission of securing and decentralizing the Bitcoin network.
Gridless Operation Gridless Hell’s Gate is powered by geothermal power.
mackenzie sigaros
“Most people are thinking about Bitcoin and the price of Bitcoin, and they are thinking about how to save the value of Bitcoin, or how to spend it,” said Eric, CEO of Gridless. Huisman told CNBC during a visit to a mine in Kenya earlier this year. “That won’t happen if Bitcoin miners and we aren’t globally distributed.”
Decentralization is a key feature of Bitcoin. Decentralization means that the network is not controlled by any entity and cannot be shut down, even if the government disapproves.
Bitcoin and other cryptocurrencies are created through a process known as proof of work. In this process, miners around the world run high-performance computers to collectively verify transactions and create new tokens at the same time. This process requires large amounts of electricity, leading miners to look for the cheapest source of power.
There are more than a dozen publicly traded miners, but thousands of smaller private operators also compete to process transactions and earn rewards in new Bitcoin. This includes individual miners in countries ranging from Venezuela to Lebanon, ranging from one mining rig in his kitchen to hundreds of thousands of rigs in industrial-grade data centers. It may also be involved.
Gridless operates a geothermal-powered Bitcoin mine at Hell’s Gate on the shores of Lake Naivasha.
mackenzie sigaros
Bitcoin mining is a volatile business no matter where it operates, as a large part of the economy depends on the price of the cryptocurrency. Since losing 60% of its value in 2022, Bitcoin has rebounded sharply, hitting a record of over $73,000 in March, but has fallen slightly in recent weeks.
Much of the rally has to do with optimism surrounding the so-called halving, which occurred late Friday, as well as the launch of a spot Bitcoin exchange-traded fund in the United States. This event occurs every four years and is designed to cut rewards to Bitcoin miners in half and reduce the pace at which new Bitcoins enter the market. Previous halving events were followed by significant gains in cryptocurrencies.
“Bitcoin is virtually unbreakable at this point,” CEO Adam Sullivan said. core scientific, a Bitcoin miner based in Texas. “Bitcoin is at a stage where it is more profitable to continue to support the network than to try to disrupt it.”
Analysts at Deutsche Bank said in an April 18 note that the geography of crypto mining will change after the halving, as lower profit margins push miners to seek cheaper and more reliable forms of energy. He said he expected it. Analysts write that the United States currently accounts for 40% of mining, Russia 20% and China 15%.
“Latin America, Africa, and the Middle East are attracting the attention of crypto miners due to their low energy costs,” they write.
Bitfarms, based in Toronto, currently operates in Argentina. marathon digitalis headquartered in Florida and also has operations in the United Arab Emirates and Paraguay.
Hersman, 48, grew up in Kenya and Sudan, and her parents were linguists. Before embarking on his mining of Bitcoin, he and his two co-founders, Philip Walton and Janet Meingi, spent years building internet connectivity infrastructure in rural and urban Africa. built.
Gridless operates Bitcoin mines in Kenya, Malawi, and Zambia using a combination of renewable energy sources. The company’s site at Hell’s Gate runs on geothermal power.
mackenzie sigaros
In early 2022, the trio began brainstorming creative solutions to Africa’s generation and capacity disparities and lack of access to electricity. They came up with the idea of mining Bitcoin. This could solve a big problem for renewable energy developers by distributing pent-up power to other parts of the continent. In Africa, 43% of the population, or about 600 million people, do not have access to electricity.
Gridless currently has eight full-time staff and uses software to manage many of its operations remotely.
turn lava into bitcoin
Home to cheetahs, zebras, and giraffes, Hell’s Gate is a deep, winding canyon fringed with cliffs, volcanoes, and thick bush.
The area is covered in ash and sulfur vapors periodically erupt from the ground. It is reminiscent of the surrounding smoldering volcanic craters that wiped out parts of the indigenous Maasai tribe in the mid-19th century and threatened other tribes that dared to try and reclaim them. live there.
Gone are the days of deadly eruptions and lava spews. Instead, an elaborate maze of piping systems and volcanic plugs make up multiple geothermal power plants.
A drill hole at the Olkaria geothermal power plant in Hell’s Gate National Park.
Getty Images/Michael Gottschalk
Bitcoin mining using volcanoes is not new.
Iceland, El Salvador, and other countries use geothermal energy to mine Bitcoin. Nick Carter, founding partner at Castle Island Ventures, which focuses on blockchain investments, says making this work for miners requires a combination of buy-in from local authorities, cheap and plentiful electricity, and some infrastructure. said it was necessary.
“If you have those three elements, it might work, but in some cases it’s nation-states or state-owned energy companies that are doing it,” Carter said. He cited the Middle East, which has entered flare gas extraction, as an example of state-level actors entering the business.
“In some cases, it’s with the explicit blessing of a nation-state like Bhutan, and in other cases, in Texas, local regulators and local conditions are very favorable,” he said.
Africa has an estimated 10 terawatts of solar capacity, 350 gigawatts of hydropower, and another 110 gigawatts of wind power.
While some of this renewable energy is already being harnessed, much remains untapped due to the expense of building dedicated infrastructure to harness renewable energy. Despite having 60% of the world’s highest solar resources, Africa has only 1% of installed solar power capacity.
Introducing Bitcoin Miner.
Bitcoin has received a bad reputation for the amount of energy it consumes. Help free up these trapped renewable power sources. Miners are essentially energy buyers, and coexistence with renewable energy creates economic incentives to enhance production.
“Often, there is excess power, not only during the day but also at night, and no one is able to absorb that power,” says Hersman. He said the company’s 50-kilowatt mining containers “can soak up whatever extra we have throughout the day.”
Steam pipes at the Olkaria geothermal power station in Hell’s Gate National Park.
Getty Images/Michael Gottschalk
“Within a second, or even a minute, there’s a certain number of active miners going up and down,” Huisman said. “It might go down to 50 kilowatts, then 300 kilowatts, then 200 kilowatts, then go up to another level. That goes on all day and night.”
According to the International Energy Agency, in rural Africa, “mini-grids and stand-alone systems (mainly solar PV-based) are the most viable solutions in more than 80% of areas with electricity deficits.” .
Bitcoin miners’ demand for these semi-stranded assets is making renewable energy economically viable in Africa. Electricity suppliers make money by selling energy that would previously have been wasted, while energy plants sometimes reduce costs for their customers. At one of his gridless test sites in Kenya, a hydropower plant has reduced electricity costs from 35 cents per kilowatt-hour to 25 cents per kilowatt-hour.
Increased production capacity is also having a major impact on households.
Gridless says its sites have powered 1,200 homes in Zambia, 1,800 homes in Malawi and 5,000 homes in Kenya. The company’s mines have also powered container cold storage warehouses for local farmers, electric bike battery charging stations and public WiFi points.
“It’s not very sexy,” Huisman said. “It’s a mining container made out of a shipping container. Inside it’s a bunch of stupid machines that run the same formula over and over again, but it’s actually protecting the network.”
