Africa Is Becoming Bitcoin’s New Power Base
A difficult problem that calls for comprehensive and long-term solutions confronts African governments and legislators. This matter goes beyond just Bitcoin or its mining; it involves markets, geopolitics, energy independence, and sovereignty. Attention must be directed towards closely observing the developments, showcasing successful case studies, and pushing for more strategically beneficial MoUs and PPEs. A crucial insight is that Bitcoin does not serve as a lifeline for Africa; rather, Africa stands as a lifeline for Bitcoin, contributing to the ongoing narrative of financial freedom and nation-state sovereignty in the 21st century. Africa’s capacity to navigate these hurdles is set to create a global standard for building resilient financial and energy infrastructures, laying the groundwork for a future brimming with optimism and opportunity for all. By 2025, Africa leads the charge in the green energy revolution, utilizing Bitcoin mining as a pivotal strategy. An increasing number of governments are delving into its integration to boost electrification, streamline energy grid management, tackle ongoing infrastructure challenges, and seize the economic advantages.
However, these developments, along with numerous others surfacing on the African continent, are part of a broader narrative. Africa’s contribution to the global Bitcoin mining hashrate is on the rise, now accounting for nearly 4%, according to Luxor’s Hashrate Index. This prompts an essential inquiry into the utilization of this hash power and the entities behind it. It is important to highlight that a significant number of miners are associated with pools outside of Africa, utilizing ASICs—devices specifically designed for Bitcoin mining—for prominent Bitcoin miners located beyond the continent. Should this trend continue, it is conceivable that numerous miners and mining pools required to adhere to OFAC lists and other US regulations may be compelled to exclude transactions originating from African nations that are on—or could potentially join—this list. This would compromise a core principle of Bitcoin as a permissionless currency. In simple terms, “hashrate exfiltration” describes a situation where an external entity or power exploits a region’s hashrate to further its own agenda, often at the expense of that region. The ongoing discussion surrounding what could be termed the hashrate exfiltration problem extends beyond Africa; it is indeed a global issue. Placing this within the African context is essential, providing a backdrop for those investigating the rise of Bitcoin mining in Africa, especially from a geostrategic and economic viewpoint.
As we observe the remarkable progress in Africa’s shift within the global digital arena, it is essential for vigilant observers to stay optimistic that governments and policymakers acknowledge these vital challenges and respond swiftly to address them before the chance is lost. The legacy of resource extraction in Africa may be on the brink of a concerning resurgence due to the increasing prevalence of Bitcoin mining, unless appropriate measures are taken. In Africa, the conversation goes beyond just concerns about possible censorship; it focuses on how the continent can utilize Bitcoin as both a foundational infrastructure and a valuable commodity. In a recent interview, Erik Hersman addressed the inquiry by asserting, “I don’t think the answer is not to have foreign companies mining [Bitcoin] in Africa.” He asserts, alongside numerous others across the continent, that there are complexities and a consensus that can be reached throughout the value chain to address the issue on multiple fronts. Bitcoin’s advantage over traditional extractive industries is rooted in its distinctive payment framework. As Erik pointed out, it goes beyond the conventional situation of a nation receiving USD for its raw materials and resources. In contrast, Bitcoin allows African nations to “be paid in the same commodity [that is, Bitcoin] and therefore get an added benefit as a part of their treasury.”
The Grand Ethiopian Renaissance Dam in Ethiopia stands as a striking example that bolsters this argument. Despite its considerable potential for electrification, the asset remained underutilized. Bitcoin mining has surfaced as a concrete answer, facilitating electrification and leveraging excess energy resources. Ethiopian Electric Power has reportedly surpassed $100 million in revenues for the year 2025, according to Sputnik News. Additionally, as Erik wrapped up our conversation, “as with any commodity, this is about making sure we capture more of the value inside of the continent, and that the benefit flows down to more people on the continent, too.” As we approach 2025, it’s crucial to recognize the notable benefits seen in African countries that have embraced Bitcoin mining. These nations are not just accepting payments and building their reserves in Bitcoin; they are also making significant strides in sustainable electrification. Entrepreneurs and builders are keenly honing in on the development of products and services, all while rolling out code changes and proposals in relevant open-source projects that address the needs of the continent. All efforts are focused on preserving Bitcoin’s position as decentralized and independent Internet Money.
