Ethiopia Becomes the First Country on the African Continent to Introduce Large-Scale, Government-Backed Bitcoin Mining

In 2024, Ethiopia achieved 2.5% of the global Bitcoin hashrate, which put Ethiopia among the leading locations for Bitcoin mining.

The country of Ethiopia in Africa has become the first in the region to introduce large-scale, government-backed Bitcoin mining, achieving 2.5% of the global Bitcoin hashrate in 2024 and placing it among the leading locations for the activity.

This status is due in large part to the country's abundant supply of hydroelectric power, which makes it an ideal setting for energy-intensive mining operations. As such, the government signed agreements with 21 mining companies, including UMINERS, to facilitate the initiative.

Joining Cointelegraph in a recent AMA session on X Space, Philip, who oversees strategy and partnerships at UMINERS, further explained that the country's focus on economic development and a potential expansion of crypto regulations also contributed to the launch.

"We know that in 2024, the Ethiopian government signed agreements with 21 mining companies to operate in the country. We can say that around 100 MW of solar and hydro power were allocated for crypto mining, which is a significant portion of their total energy production. They also set a goal to achieve 10% of the global hashrate by the end of 2024, which they nearly reached with 2.5% by the third quarter. This puts Ethiopia among the leading countries for Bitcoin mining."

"Now, to understand how this came about, we need to go back a few years. Ethiopia used to have a lot of problems with the power grid. But in recent years, they built the Grand Ethiopian Renaissance Dam on the Blue Nile River near Addis Ababa. This investment has really paid off, as they now have a massive surplus of hydroelectric power."

"At the same time, the government is keen on developing the digital economy and attracting foreign investment. Since crypto trading is still illegal in Ethiopia, this partnership with UMINERS can be seen as a broader shift toward economic openness and a possible expansion of crypto regulations. I think it's going to take some time for Ethiopia to become more crypto-friendly in terms of payments. The reason for this is the limited supply of US dollars. Their strategy is to bring in miners and data centers, which have high electricity costs, to set prices in USD. In this way, the government builds up a USD surplus that can then be used in international trade."

Moreover, Philip highlighted the company's plans to expand its local presence, particularly through hiring and training.

"We will be hiring a large number of people in the region. And to meet the demand for skilled workers, we want to work with local universities to create courses and support job growth and future pathways for people. We're also planning to work with NGOs to provide training programs in technical skills like network administration and hardware maintenance to prepare the younger generation for employment opportunities in the crypto industry."

Reflecting on the evolution of Bitcoin mining, he noted that the industry has come a long way since its early days.

"Back when it first started, anyone could set up a computer and start mining. Over time, you needed more and more powerful equipment. Now, on average, a miner costs between $3,000 and $10,000. So it's not really for the average person anymore."

To maintain accessibility, UMINERS has launched a zero-interest, Bitcoin-collateralized loan program, especially for smaller businesses entering the space.

"The way it works is pretty simple. Clients go through an approval process, and once approved, they can deposit Bitcoin into a Ledger Enterprise account. That Bitcoin is held as collateral to fund the purchase of mining machines. The machines are housed in UMINERS data centers as additional collateral, while clients repay the loan in monthly installments of 10%. For each installment paid, clients receive 10% of their Bitcoin back. This system allows our clients to keep their Bitcoin and benefit from its future value, rather than having to sell it upfront."

In addition, UMINERS expects to launch cloud mining options in the near future, with two tiers: one for institutional clients and another tailored for individual users.

"I think we'll eventually become more government-focused, where big governments and big corporations will do the mining. We make mining easier for them by taking care of the whole turnkey solution - mining rigs, hosting, logistics. We're also planning to launch cloud mining options in the near future, with two tiers: one for institutional clients and another tailored for individual users."

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