Bitcoin is often framed by critics as a waste of energy.
But in Bondo, like in so many other places around the world,
it becomes blazingly clear that if you aren't mining Bitcoin, you are wasting energy.
What was once a pitfall is now an opportunity.
Greetings and salutations, my fellow clubs. My name is Walker and this is the Bitcoin Podcast.
The Bitcoin Block Height is 827365 and the value of one Bitcoin is still one Bitcoin.
Today's episode is Bitcoin Out Loud, where I rejuvenate Bitcoin or Bitcoin adjacent piece,
Out Loud. Today, I'm reading Stranded, How Bitcoin is Saving Wasted Energy and Expanding
Financial Freedom in Africa by Alex Gladstein. Just like with Lynn Alden's article that I read
earlier this week, this is my first time reading through Gladstein's latest piece,
so I figured I might as well read it out loud for you too, two birds with one stone and all that.
For those that don't know, Alex Gladstein is the Chief Strategy Officer at the Human
Rights Foundation and I highly recommend you check out the incredible work he does at HRF
and his numerous other writings and you should also go read his book Hidden Repression.
As always, if you are into watching other people read, you can watch the video version of this show
on Rumble, YouTube, or X by going to adwalkeramerica. Or if you're like me and you just prefer to listen,
check it out on fountain.fm or wherever you get your podcast by searching for the Bitcoin podcast.
If you do listen to the Bitcoin podcast on fountain, consider giving the show a boost or
creating a clip of something you found interesting. And if you haven't checked out fountain yet,
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only company interested in sponsoring another fucking Bitcoin podcast, hit me up on social
media or through the website, bitcoinpodcast.net. Without further ado, let's get into this Bitcoin
out loud read.
Stranded. How Bitcoin is saving wasted energy and expanding financial freedom in Africa.
Alex Gladstein of the Human Rights Foundation reports on how Bitcoin is monetizing stranded
energy, financing electrical infrastructure, and empowering millions. Published by Bitcoin Magazine.
Hundreds of millions of Africans face two problems holding them back from progress.
600 million lack electricity. While virtually all 1.4 billion people on the continent
lack high quality currency. Compare this to the U.S., Northern Europe, or Japan, where nearly
everyone has access to consistent affordable power and a widely accepted reserve currency like the
dollar, euro, or yen. The longer that Africans suffer from power blackouts and high inflation,
the harder it is for them to get a leg up despite their best efforts. Worse still, legacy energy
and financial providers have no incentive to alleviate this issue, meaning currency debasement,
debt traps, and grid shutdowns persist. Most might look at this scenario and conclude that the next
African century will be very difficult. Despite being blessed by abundant energy sources like
mighty rivers, blazing sun, strong winds, and geothermal heat, Africa remains largely unable
to harness those natural resources for its economic growth. A river might run through it,
but human development in the region has been painfully reliant on charity or expensive foreign
borrowing. Until now. In the eyes of some of the continent's entrepreneurs, educators, and
activists, something has emerged that has the potential to revolutionize access to reliable
electricity and high quality currency, the building blocks of progress for Africa's swiftly rising
population. Believe it or not, that thing is Bitcoin, one. Mining in the shadow of Mount
Melange, a little over an hour southeast of the city of Blontier in southern Malawi along scenic
dirt roads, towers Mount Melange, a stunning 3,000 meter massive, one of the highest peaks in southern
Africa. Its complex of cliffs and valleys straddles the border with Mozambique. The jaw-dropping
scenery rivals Yosemite, but given its remote location, there are many days of the year where
local guides say there are no hikers at all. In any other country, Melange might be the site of a
top five national park with world-class, soaring granite faces and the biggest vertical climbs in
Africa. But most days, the area sits quiet. In the 18th and 19th centuries, the region was hit hard
by European and Arab slavery. Portugal, Oman, Britain, and other empires extracted hundreds of
thousands of slaves from Mozambique, Malawi, and the surrounding areas to ship off to be forced
labor in the Americas and the Middle East through regional ports like Zanzibar. At best, one in five
survived the journey. Slave routes passed right through Mount Melange, which was an easily identifiable
marker along the way. Today, the mountains foothills are peppered with lush forests, encroaching tea
plantations, and farmers growing pineapple, banana, and maize. The ecosystem is a world treasure,
with endemic plants and animals, including prehistoric cycads, the endangered National
Tree of Malawi, the Melange cedar, and some of the rarest insects and reptiles on earth. Sadly,
the exploitation from long ago continues, just in different forms. Logging and mining threaten
the local environment, and without industrial infrastructure, residents are isolated and left
to fend for themselves. The population here may be gifted with many natural resources,
but the mother of modern progress has eluded them. Only about 15% of Malawians, and only about 5%
of people living in the country's rural areas, have access to electricity. In Bondo, a small village
in the foothills of Mount Melange, some residents got their very first access to lights at night
in 2016. Before then, according to the town's senior chief, there was only darkness. This lack
of power creates several problems for a growing population. Instead of flipping on a stove,
residents log the area around the mountain, cutting down trees and brush to make fires or to create
charcoal for cooking. At night, children study under the light of dangerous paraffin lamps,
or don't study at all. The logging devastates the forest, and the fires and lamps create
noxious indoor air pollution. Foreign donors, including the Scottish government, paid for a
small hydroelectric plant for Bondo in 2008. And after eight long years of construction,
it began to provide power for some of the local population. During that time, Carl Brousseau,
an avid hiker in the head of the Mount Melange Conservation Trust, helped start the Melange
Electricity Generation Agency, MEGA, Malawi's first privately-owned microhydro-energy provider.
MEGA is also a social enterprise, with the mission of providing the citizens of Bondo with electricity.
The raw cost of power from a small hydroscheme like the one financed by the Scots on the banks of a
river in Melange is extremely high, nearing 90 cents per kilowatt hour. For context, residential power
in the U.S. or Europe ranges from 10 cents to 20 cents per kilowatt hour. Grid power in Africa
typically ranges from 20 cents to 40 cents per kilowatt hour. For example, in Kenya,
it's 27 cents. Carl, in his efforts to give back to the local community, heavily subsidized this
cost for the residents of Bondo. Due to his generosity, they paid less than 20 cents per
kilowatt hour to MEGA for electricity. Carl covered the difference, but such an operation was not
sustainable. Over 2,000 households had so far been connected to the MEGA grid, but another
3,000 were still waiting for hookups to their homes, and Carl was running out of money. The power
stations were producing more than enough power for 5,000 homes, but much of the electricity was
orphaned and unable to be sold, as MEGA did not have the capital to be able to purchase equipment
to connect to new households. There was no capital either to consider expansion so that the hydropower
would not dwindle in the late summer during the dry season. In some places, industrial operations
might buy orphaned rural power, but in a place like Bondo, there simply aren't very many power
hungry businesses. The excess electricity couldn't be sold, so the power stations built machines
that existed solely to suck up the unused power. This was especially tragic when there was a lot
of rain, or at times of low demand, like at night, when the stations were forced to dissipate the
overwhelming majority of their precious electricity, a total waste. Two years ago, entrepreneurs
Eric Hursman, Janet Mainji, and Philip Walton launched Gridless, a new company focusing on
off-grid Bitcoin mining in Africa. The trio had backgrounds with companies like Usha Shidi,
BRCK, and iHub, with expertise in building hardware, writing software, as well as scaling
communications and internet infrastructure, giving them a fitting resume for the task.
One of their first site visits was in Bondo, where they visited with Carl and inspected
Bondo's power stations. In early 2023, a Gridless Bitcoin data center was installed and launched.
And now Carl and Mega have a new source of capital. In December, I was able to travel to Bondo
to figure out how it all works. Today, any and all excess power generated by Bondo's power stations
gets sold in real time to the Bitcoin network by Gridless's miners, and Carl earns 30% of that
revenue. It arrives directly to Mega's wallet in BTC. The new capital is enabling Mega to connect
more customers to power, drive costs down, and expand their operations to eventually connect
everyone in the Bondo region to electricity. Mega, the community, and Gridless all benefit,
and the most profound part? No aid or government subsidy is required. Bitcoin is often framed by
critics as a waste of energy. But in Bondo, like in so many other places around the world,
it becomes blazingly clear that if you aren't mining Bitcoin, you are wasting energy.
What was once a pitfall is now an opportunity. Bitcoin miners can be thought of as dung beetles,
scraping up the waste energy that no one else wants and transforming it into something valuable.
As Mega hooks up more and more customers, Gridless may unplug some of their mining machines and move
elsewhere, or perhaps move to harness the output of new power generation stations,
in the same area that are waiting to connect to their clients. If the Bitcoin network pays X,
customers will need to pay X plus 1, so eventually miners will start to get priced out.
But even in a situation where at 5pm, the local demand from Bondo eats close to the full capacity
of what's available, mining can still be lucrative, because there's so little demand overnight,
and the river never sleeps. Elsewhere in Malawi, the national grid is broken.
As of December 2023, people who receive grid power suffer from 6-8 hours of load shedding
per day, where huge swaths of the country's population are cut off from power by the electricity
company. But in Bondo, there is no load shedding.
The mini-grid is properly balanced by Bitcoin miners. If there's not enough water power, Gridless's
automated software turns the ASICs off. If there's too much water power from, for example,
one of the tropical cyclones that periodically hammers the region, Gridless's ASIC operation
eats it up. It's a small, small, small, small, small, small, small, small, small, small, small,
small, small, small, small, small, small, small, small, small, small, small, small, small, small,
small, small, small, small, small, yes, badly, that's that,
put that
ahead to now.
powerful site to see, and staggering to think that Bitcoin is helping to make it happen,
as it converts wasted energy into human progress.
The potential for this model to scale is mind-boggling.
Consider, power generation in Africa is typically planned looking forward, for example, on a
30-year window.
So sites are built to provide future capacity, not the capacity of today.
So when a site like the one in Bondo boots up, it takes a while before it can get from
0% to even 20% capacity.
At that point, before Bitcoin, the power company might have had to charge five times the price
for the electricity it sold, just to make itself whole.
This is catastrophic for customers, especially those like the ones in Bondo, who have some
of the smallest disposable incomes on the continent.
But with Bitcoin, the network now buys 100% of all the available excess electricity, bringing
costs down even if only a small percentage of the power station's capacity is being
purchased by residential or industrial customers.
We are told to believe that progress is always happening and that pure human innovation is
going to make things better and cheaper.
But in Malawi, given the collapse of the local Quacha currency and the lack of incentives
for infrastructure investment, the expansion of the electricity grid has not just been
stalled, it has been made prohibitive.
Bitcoin fixes this in two ways.
By directly delivering a high-quality, peer-to-peer currency to the power generators, and by allowing
them to use all of their capacity, all of the time, lowering prices for their consumers,
and raising their profits, roughly 95% of all small power generation in rural Africa,
according to Eric, is funded with concessional financing, where it could take five to seven
years to raise the funds from charity.
The process is dependent on altruism, and the subsidy is someone else doing the right
thing.
The micro-hydro stations in Bondo, for example, were paid for by foreign donors, who can be
very helpful for getting a project off the ground, but who typically don't pick up the
bill for ongoing operation costs or expansion.
They also don't have very much skin in the game, and are okay with an eight-year time
frame for getting people online.
With Bitcoin, the incentives are different.
Out with the donors, in with co-investors, who are very interested in getting the power
up and running as soon as possible.
Moving forward, there's much work to do in Bondo.
Carl and Mega are currently determining how to leverage their new income stream from the
Bitcoin network to connect up hundreds of new homes to electricity.
They are also considering an expansion to a new, larger power station to address the
issue of low power output in the two driest months of the year.
It would, of course, be built in partnership with Gridless, so that it could start generating
revenue immediately on day one, even if it takes time to connect new homes and businesses.
The critical importance of electricity was underlined when we met Bondo's community
leaders and members of the residents' electricity committee.
They listed all of the new benefits that the town received.
They used to have to walk 20 kilometers for things like corn mills or televisions or
refrigeration or to charge phones or for their kids to study at night or for healthcare.
And now, they don't.
The ladies in our meeting even pointed out a funny thing.
Before, the men of the village would go to town to watch football at night, leaving their
families behind.
But today, they don't leave.
They just watch it at home and are there for their wives and children.
LEDs replace kerosene lamps, reducing fire risk and deadly indoor pollution.
The percentage of children that go on to higher levels of schooling has increased dramatically.
The list of life upgrades goes on and on.
By this point, you might be saying, fine, this sounds good, but why not do something
else with the electricity generated by Bondo's rivers?
Philip explains that no other business would run better in a place like this, blessed by
cheap energy but isolated from infrastructure.
The cost of AI farming, for example, is only in a small way dictated by electricity.
A chip might cost $30,000 and use 1,200 watts.
Contrast this to Bitcoin mining, where electricity makes up a huge portion of the cost, and a
chip might cost $1,200 and use 3,500 watts.
So it makes no economic sense to build an AI data center in Bondo, not to mention the
connectivity, bandwidth, and latency issues.
Moreover, AI processes cannot simply be turned on and off like Bitcoin mining, without causing
some kind of harm to the service itself.
So AI compute in its current form cannot be a grid balancer.
But Bitcoin can.
When the microgrid needs to deploy electricity elsewhere, miners can turn off easily.
Finally, even if Mega tried to convince AI companies in Bondo, how would they get paid?
It would be the same trap of foreign exchange problems, fees, and dealing with the collapsing
local currency.
With Bitcoin, they get paid in globally accepted 24-7 saleable satoshis.
One more area of potential is the externality of Bitcoin mining, heat.
When we put our hands over the air exhaust coming out of the back of the gridless facility
in Bondo, we felt a searing blast.
The more miners, the more heat.
A miner is in essence a space heater, and a surprisingly efficient one at that.
A new reason documentary helps explain this, focusing on a bathhouse in Brooklyn, where
the owner is now paying less every month in electricity bills to heat his spa water with
A6 than he did using more traditional heating equipment.
Any heating operation that is not mining Bitcoin is probably wasting energy.
1,000 miles to the north of Bondo, in the DR Congo's spectacular Varunga National Park.
Rangers have been mining Bitcoin with stranded hydropower for the past three years, generating
critical income for the bio-reserve, and the 5 million people who live nearby.
This coming March, the heat from Varunga's miners will be harnessed to dry cocoa beans.
Traditionally, this is done by laying out the beans to roast under the sun, where they
are vulnerable to the weather, and to being eaten or stolen by animals.
Drying the beans with the hot blast from the miners will dramatically expedite the process,
and for minimal additional cost.
Instead of spending $200,000 on an industrial drying operation, the park rangers simply
bought $200,000 worth of A6 that can process cocoa and earn Bitcoin.
Moving forward, if any of their competitors process cocoa and don't mine Bitcoin, they
will be wasting energy, and they will be less competitive.
According to environmentalist and Bitcoin advocate Troy Cross, in the last Bitcoin
price cycle that crescendoed in late 2021, mining was driven by access to cheap capital,
not cheap power.
For example, Wall Street borrowing cheaply to buy shares in Bitcoin mining companies,
but in the next cycle, he says, it will be driven by access to cheap power, and this
could tilt in Africa's favor.
There might even be places, he says, where the cost to mine, let's say in Blanter, exceeds
the mining benefit, but the business savings from the excess heat, selling chocolate, makes
the whole thing profitable.
Really, he says, one should think in terms of profit from mining plus profit from heat,
minus the cost of mining.
Anywhere where one finds low-grade electrical heat, there are unrealized Bitcoin profits.
In Bondo, Mega's original idea was to make dried pineapple snacks using the excess heat,
but on our visit, a new idea was hatched.
The mine itself is on a tea plantation.
Tea, once picked, needs to be dried within a matter of hours, and it is done so with
heaters, which suck up electricity.
Why not use asics to dry the tea?
The operators are now thinking about it.
In a place where electricity is typically exceedingly scarce, it's a luxury to think
about and consider what to do with extra power.
But it's happening in Bondo now that there's a technology that allows people to harness
value that was once just blown out the window.
2.
The Collapse of the Quacha
One Wednesday morning in November 2023, the 20 million citizens of Malawi woke up to find
their currency devalued by 44%.
The government and IMF argued that the move would boost exports and stabilize the economy,
but for the average person, all they felt was an immediate decrease in purchasing power.
Many merchants simply closed for the day, as employees needed time to recreate the price
labels used everywhere from gas stations to grocery stores.
This was not, like in Argentina, something that most people could escape.
In Argentina, there is a widely accessible and sophisticated black market for dollars.
In Malawi, this doesn't exist.
People are stuck in the Quacha.
According to the country's Reserve Bank, 85% of Malawians are unbanked, meaning nearly
everyone uses paper Quacha notes issued by the government as their main store of value
and medium of exchange.
Even here remains an effective way to steal from the population.
If one were to design the perfect weapon, something that could hurt everyone in a country
at the same time, it's hard to think of a better one than currency devaluation.
Unlike a nuclear blast or bioweapon, it can hurt every single person simultaneously.
In this case, the damage was an immediate 44% reduction in the purchasing power and
standard of living for millions of people in Malawi, especially the poorer and middle
classes who cannot easily access dollars.
It is not as if the government held a referendum, asking the public to vote on whether they
wanted their purchasing power to collapse the following week.
Of course, no one would agree.
Devaluation has to be planned and orchestrated mostly in secret, and it tends to be an overnight
phenomena.
So despite the status of Malawi as a partly free country, with relatively free and fair
elections, the devaluation was entirely undemocratic.
This is part of a larger global issue where financial repression is ignored, even though
political repression is discussed and highlighted.
Devaluations, for example, tend to be relegated to the back page of the newspaper, cast as
a procedural matter, but they inflict grievous harm.
It is a wonder why devaluation is not considered a crime, or even a crime against humanity.
The people of Malawi did resist in a series of protests.
These small uprisings were put down, often brutally, by police.
And ultimately, the marchers were forced to give up and accept the theft.
This wasn't the first time that the public was robbed of its labor and wages at scale,
either.
The Quacha has lost 95% of its value against the dollar, much of it in planned devaluations
like this one.
As we drove through the markets and farms near Blanter, it was clear that the hardworking
people around us did not need such a devaluation.
They were already some of the poorest in the world.
Guarantees per capita income, according to the United Nations, hovers around $650 per
year.
That's $0.33 per hour, assuming a 9-5, 5-day work week.
And that is, of course, the median rate.
For people living in remote areas, it's probably much closer to $100 per year, or $0.05 per
hour.
And now, each hour of their effort only gets them 56% as much grain, fruit, meat, airtime,
electricity, medicine, private schooling, or petrol as it did two months ago.
This particular devaluation, like so many others, was a result of foreign pressure from
the IMF and World Bank, who want client countries to pass through austerity before receiving
any fresh new funds.
Austerity is a euphemism for weakening the currency, ending subsidies on basic goods,
shrinking welfare, raising taxes, crushing unions, harming small local businesses, and
creating more favorable conditions for large multinational corporations and buyers of any
locally harvested, excavated, or produced goods.
After completing the late 2023 devaluation and pleasing its creditors, Malawi received
the green light for $137 million World Bank loan, as well as a new loan of $175 million
from the IMF.
115 million of these loans have already been paid out as of early December, a Christmas
bailout for the country's corrupt bureaucrats.
The IMF projects that Malawi will need $1 billion in debt relief over the next three
years, ensuring that a lot more currency devaluation is on the horizon.
Word on the street is that another devaluation, perhaps another 25%, is coming.
The macro impact on the country's economy has already been huge.
Airtel, one of the country's largest mobile operators, posted a statement at the end of
2023 that the company's profit is expected to be 100% less than the profit posted in
2022.
The adverse deviation, they write, has arisen from the impact of the foreign exchange loss,
because the Malawi Quacha has lost 66% of its value to the United States dollar since
June 2023 to date.
Citizens might have stopped protesting in the streets against this disaster, but some
are finding other, more quiet ways to wage a revolution.
Grant Gombwa is a student living in the Blantier region, and is one of the country's first
Bitcoin meetup organizers.
He loves the idea of a currency that no government can devalue.
Malawi's first official Bitcoin meetup will take place in February in the capital, the
Longue.
Grant will make the five-hour drive to unite with perhaps two dozen other Bitcoiners.
It's a modest start, but given the economic conditions, it's likely a trickle in what
will eventually become a flood of new Bitcoin users.
Grant said that, personally, what inspires him is that before he was stuck, unable to
pay for anything abroad with his native currency, but today he has an upgrade, and he can speak
the same monetary language as someone in New York, Cairo, or Beijing.
Grant estimated that among young people in Malawi between 18 and 30 years old, that nearly
all of them owned a phone, and that around two-thirds own smartphones.
Not all smartphone users can afford consistent data, of course, but that doesn't prevent
them from using Bitcoin.
As we'll learn more about later in this story, Africans in countries like Malawi can use
a service called Machankura to send or receive Bitcoin from any feature phone or any smartphone
with no data, no internet required.
This means that an economic escape route is here.
It will just take Grant and other local educators some time to show people the way.
In one of our conversations, Grant explained a potentially promising idea.
The Malawian government, he said, with incentives from foreign lenders, is installing electric
vehicle charging stations across the country.
He guesses that very few locals will actually be able to afford these types of cars, especially
in the first few years.
So these solar-powered electric generators will be for the most part sitting unused,
wasting the sun's energy.
Enter Bitcoin.
Grant's idea is to bring a few ASICs to these likely idle charge points, hook them up, earn
some satoshis, and pay a percentage to the owner of the property to make sure he doesn't
get kicked out.
We'll see if Grant's idea gets traction, but what's certain is that there will be
many more ideas like it, springing out of places like Blontier and Bondo, now that wasted
energy can be turned into capital.
3.
Turning Fire Into Digital Gold.
The Great Rift Valley is one of the largest areas of seismic and volcanic activity on
Earth.
The geothermal energy potential in this part of Africa, stretching 7,000 kilometers south
from the Red Sea to Mozambique, is vast and nearly entirely untapped.
To get a sense of the potential that Bitcoin mining could have on the region, I visited
a site a few hours outside of Nairobi, Kenya, on the shores of Lake Nivasha.
The situation is representative of any number of industrial operations in rural Africa, or
for that matter, in rural places anywhere in the world.
A 1.4 megawatt geothermal plant, which funnels hot steam rising out of a 2,000 meter deep
hole through a turbine to generate electricity, powers a water pump perhaps a kilometer away
on the shores of the lake.
The pump pushes the lake water up to a nearby complex of fields, where flowers are grown
and exported to supermarkets in Europe.
This is just one such flower farm in a country full of them.
Kenya is the world's largest flower exporter, and all of those fields need irrigation, and
all of that irrigation needs power.
Here's the thing, these water pumps do not consume power in a consistent way, but geothermal
power is always on, hinting at a tremendous amount of electricity waste just waiting for
someone or something to come and buy it up.
Geothermal is probably the single best existing power source in the world for mining Bitcoin.
Geothermal is great, but during dry months it can slow down.
Nuclear might be better in a vacuum, but it's impractical at the moment for small sites,
and at least a decade away from a rollout across Africa.
Geothermal is 100% clean and 100% consistent.
A plant like the one here in Naivasha could run for 40 years with no interruptions and
no change in power output.
It's one of the many that make up a total of 1 gigawatts, i.e. 1000 megawatts, of power
generation just in this region alone.
The foreman in charge of the site tells us that the surrounding hills and valleys could
actually support up to 10 gigawatts of geothermal electricity, but the rest remains untapped.
Down at the pump, we see something that could be present at any industrial operation in
the African countryside.
A small shack with a starlink on top emitting a strong hum.
Inside there are 144 What's Minor ASICs set up, neatly corded, and run by Gridless.
Everything from the HUD itself to the software is custom made in Africa by Africans.
It's a 500 kilowatt operation, which is about perfect according to Eric, for a situation
like this.
He shows me the actual electricity used by the ASICs on his cell phone, about 375 kilowatts
on average every day.
This is projectable into the future.
Gridless has done a five-year back study on Bitcoin mining revenue and can predict being
paid between 7 and 9 cents per kilowatt hour by the Bitcoin network.
If the BTC price goes up, the earnings get beaten back down by the new mining competition.
If the BTC price goes down, it becomes easier to mine, the difficulty adjustment in action.
The upfront cost for a setup like the one on Lake Nyvashia runs in the low six figures,
including the ASICs and other infrastructure.
Generally revenue for the Bitcoin mine will be a few hundred dollars.
Gridless pays out 30% of the revenue to the power company as a flat fee for the right
to use the stranded electricity.
Depending on the consistency of the excess energy, Gridless generally recovers their
investment within a few years.
One can quickly see how Bitcoin mining is going to be enormously profitable across Africa.
If you know you are building a variable demand power station in the future, you will incorporate
Bitcoin mining from the start, says Eric.
Otherwise, you're wasting energy.
Storing the energy in batteries and using it later sounds like a nice idea, but doesn't
make economic or technological sense right now, he says.
Imagine a slightly larger two-megawatt operation similar to the one at Lake Nyvashia.
It could be $1 million in gross revenue per year, and not in quatcha or shillings, but
in cold hard satoshis, payable directly to the site, no accounting office, or foreign
exchange costs required.
The scene by the lake is perfectly solar punk.
The earth's heat is powering agriculture, and the Bitcoin mine is eliminating any electricity
waste and converting it instead into digital gold.
It's sitting here in a place like this that you realize that not Bitcoin mining is such
a staggering waste of energy.
Later, as I talk with the Gridless team about the implications of the Lake Nyvashia site
at a restaurant in Nairobi, the power goes out during our meal.
Janet tells me that this is typical in Kenya, but that Bitcoin can help fix this as a demand
response technology.
During the day, there's a lot of demand, and we turn off our machines, she says.
At night, when people go to sleep, we turn on our machines.
Normally, if there's too much unplugging too fast, it can cause blackouts, but we can
balance the grid with more Bitcoin mining.
We can absorb sudden incoming power, and we can slow sudden collapses of power by turning
off.
Basics can be turned on and off at a moment's notice without harm to the operator.
Unlike manufacturing or other compute processes, making Bitcoin mining one of the best technologies
in the world for stabilizing grids.
What Gridless is doing at small scale with off-grid energy could also help the national
grids struggling all across the continent.
Micro, hydro, and geothermal aren't the only power sources that Gridless is tracking.
Solar, they say, only provides energy during one third of the day, and requires expensive
battery technology to be viable.
Such batteries could triple the cost of operating a power site, making it far less appealing.
Gridless does have its eye on a few wind sites, but another option is biomass energy.
In the past weeks, the company has brought two East African Bitcoin mining sites online,
powered by biomass.
One new mine adorns a sugar processing facility, and one complements a plan that refines sea
salt, a tough fiber used for rugs, rope, and other textiles.
In both cases, the leftover plant material is burned, and the heat boils water to power
a turbine, generating electricity.
In both cases, as is the case for most African industrial operations, the site is too far
from any residential communities to directly power homes or other businesses.
Often, the electricity is simply just run straight back into the ground.
Biomass is generally considered clean and renewable.
Sea salt and sugar plants suck carbon dioxide from the air into their constituent parts,
and then when they are burned, that carbon is released back into the sky.
Sea salt and sugar production is widespread in East and South Africa, and yet the excess
power typically goes to waste.
Philip explains that even in the case where a power generation piece is added to a sea
salt or sugar refinery, the operators can't usually produce electricity unless about 70
percent of the capacity is used, otherwise the boiler malfunctions.
In the case of the sugar refinery, there was no one close enough to buy the power.
In the case of the sea salt farm, the power generation feature was simply never turned
on.
Again, enter Bitcoin.
With gridless technology, these power stations are now running at close to full capacity and
saving the previously orphaned electricity, turning it into capital.
ASICs will become an integrated component of any energy site, says Philip, a turbine,
a transformer, and a mining container.
This is just what you will do.
If you don't, you won't be competitive.
You'll be wasting energy.
4.
Bitcoin without Internet As of 2023, some 600 million Africans lacked
Internet access.
More than half the continent is still offline.
Starlink makes what gridless does possible, and innovative companies like BRCK continue
to expand Internet access in rural places.
But what good can Bitcoin do for the average citizen of a country like Malawi, where only
a fraction of the population is online?
Ten years ago, Bitcoin educator Andreas Antonopoulos wondered, what if Africa could leap
frog banks, just like an elite frog landline telephones?
What if people just used their phones to access Bitcoin-powered financial services?
He even wondered, could this be possible without Internet access?
As fate would have it, an entrepreneur named Kolatso Nugaku, born in Mamalodi, a township
outside of Pretoria, originally built by the apartheid government of South Africa, would
come up with a solution.
Nguco, or KG as he is commonly known, was working as a computer scientist at the Council of
For Science and Industrial Research in Pretoria about eight years ago when his boss gave him
a new assignment, Research Bitcoin.
KG was once offered a $1,000 payment in Bitcoin in 2016 for a remote gig, 1.3 BTC then, worth
more than $50,000 today, but took the payment in PayPal instead.
Why?
He couldn't use Bitcoin for anything.
The CSIR study he worked on rekindled his interest, but ultimately the researchers concluded
that blockchain technology was the thing that had merit, not Bitcoin.
In 2017, Bitcoin's price shot up, and KG, like many others, finally took a harder look.
But what initially attracted his interest was the galaxy of crypto tokens that sprouted
up around Bitcoin.
By early 2018, when the next bear market began to hit, he was trading a dizzying array of
tokens on Binance.
He had a bunch of altcoins that had lost so much value they couldn't even be traded on
the engine.
So KG visited a dust page to convert them into Binance's native BNB token, and from
there he converted to BTC.
He eventually did enough reading and research and had seen enough.
He wanted to start saving in and working in Bitcoin, not other digital currencies.
Warren Buffett in particular had inspired him.
What will gain value over 30 years, thought KG, Bitcoin, he thought, and maybe not so
much the other tokens.
The first Bitcoin project KG created was Exonumia, named after an old word for the study of currencies
and numismatics.
In 2018, he wasn't ready to contribute to Bitcoin with code, but at least he thought
he could introduce the idea to more people.
Exonumia is an African-wide translation platform still in operation today that puts Bitcoin
educational materials into dozens of African languages, from Berber to Malagasy to Shona.
The key, KG said, was the architecture of the translation itself.
Most people would try to automate translations using software, but that wasn't the full point
of the mission.
Using a human network was the real goal, so KG did it the slow way and would recruit people
from various countries in Africa and pay them to do the work.
Over time, he got to know bit coiners in dozens of places across the continent.
In 2019, he expanded this network by hosting regular spaces on Twitter and inviting anyone
in Africa with an interest in Bitcoin.
People would message him out of the blue on the Exonumia account, with new ideas from
new countries and new projects were born.
After his CSIR job, KG took a role at AWS, but ultimately, the work there felt like it
was taking him further away from the things he found interesting.
It was, as he says, completely disconnected from the realities of life back in the South
African townships where he grew up.
Exonumia seemed so much more important.
At the end of 2020, he decided to quit the corporate world and work full time on freedom
technology.
The first software project he spun up was a VPN called contentconnect.net.
Privacy is hugely important to KG.
Not that long ago, he says, South Africans lived under a dictatorial state of surveillance
and control.
He pointed out that Steve Bico published his famous, I write what I like essays under a
pseudonym.
Once the authorities found out he was the author, they put him on trial and killed him.
Everyone can be a hero, KG says, but if they feel like it's too risky, they won't take
the biggest steps.
So creating a privacy boosting VPN accessible to Africans was a worthy goal.
KG's next project was a software solution to what he saw as one of the biggest barriers
to Bitcoin adoption in Africa, the lack of internet access.
Ten years ago, he was part of an MIT global startup labs effort working on mobile money
in South Africa.
The problem was that the mobile money system was fragmented and they wanted to try to bridge
the different types of credits that people used across the country.
This is where he started tinkering with USSD, a protocol for communication over text messaging.
No internet required.
In May of 2022, a Namibian Bitcoiner wrote, There has got to be a way to get a Bitcoin
wallet onto a non smartphone mobile phone.
Someone out there is definitely smart enough to figure this out.
I believe in you.
KG quickly responded, Give me two weeks.
He was ready.
He had taken a pay cut known as a sole dividend when he left Amazon to work on his VPN, but
he was more energized than ever to work on Bitcoin.
A few days after his famous tweet with the experience from the MIT challenge a decade
ago in mind, he launched Manchankura, referring to the South African slang term for money.
The new service would allow feature phone users or smartphone users with no data to send,
receive, and save Bitcoin.
Some of the biggest challenges that Manchankura overcomes are in the UX area.
Traditionally, to use Bitcoin, people need to copy and paste an address or read a QR
code.
But feature phones in general do not have these capabilities.
KG's tool would also need to use lightning to overcome the increasingly high on chain
fees.
But USSD has a 182 character limit, so lengthy lightning invoices were not going to fit.
The solution was to adopt the lightning address, a mechanism invented by the Brazilian software
engineers Andre Neves and Fiat Jaff, which gives Manchankura users an email based human
readable identity.
For example, your phone number at 8333.mobi.
Today, Manchankura users can send Bitcoin to each other using phone numbers or lightning
address usernames.
They can also use on-chain addresses or lightning invoices, assuming their phones have copy
paste functionality.
But the former two options are dominant.
To fire up the service, a user dials a number from their phone, generating a text response
with various options, a decision tree of sorts.
To send, press 1, etc.
From here, a user can do a variety of things with Bitcoin with no internet.
One powerful functionality is the overlap with Azteco, a voucher service.
So for example, KG might go into a convenience store in South Africa, and with cash buy a
voucher called OneVoucher.
In Kenya, someone might buy a similar voucher using M-Pesa.
It's a 16 digit code with a certain amount of value on it, and this code can be entered
into the Manchankura menu.
On the back end, what KG and the team are doing is buying an Azteco voucher with a 16
digit code, and crediting the account of the Manchankura user.
This allows Manchankura users to easily top up their Bitcoin account using cash or M-Pesa
credits.
Manchankura also has an API to BitRefill, so any product available on BitRefill can
be sold on the app's user interface.
Availability ranges by country, but when they go to option 4 inside the app, they can barter
for goods and services, for example, airtime or grocery vouchers.
What this means is today, as we begin the year 2024, Manchankura's user base of 12,000
Africans are able to send and receive value globally, buy mobile minutes, buy vouchers
for gas or petrol, purchase electricity through prepaid vouchers, or trade into cash, all using
Bitcoin with no internet.
KG's dream is starting to be realized.
Of course, big challenges remain.
One is scaling across the entire African continent.
Right now, KG works with services like Africa's Talking to access different telecom networks.
In that model, Manchankura pays a monthly fee to Africa's Talking for airtime instead
of the users paying for the telecom directly.
The scaling is a slow but steady process, but it is happening, even in places like Malawi.
A second challenge is custody.
At the moment, Manchankura is a custodial service, meaning they hold your Bitcoin, not your keys,
not your coins.
So even though it's a very useful tool, it's not actually giving property rights to its
users.
But, in the coming month, Manchankura is planning to release a proof of concept that allows
users to self-custody.
If it works smoothly, it will be one of the biggest innovations in Bitcoin's history,
allowing people without the internet to actually be their own bank.
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The trick, KG says, is that a SIM card is a computational platform that can store things.
It can, for example, sign Bitcoin transactions or interface with the Lightning network.
He is incentivized to push much on Quora in this direction for the mission of human freedom,
but also for business reasons.
They don't want to grow as big as M-Pesa and be liable for all user funds and to carry
so much counterparty risk.
This way, when KG goes to Vodafone to pitch a partnership for tens of millions of new
users, he can say, how would you like to introduce your users to Bitcoin with no counterparty
risk?
It's a much easier yes than if you were to say, let's introduce your users to Bitcoin,
but you have to hold all the funds and deal with those regulations and laws and responsibilities.
In the West, Bitcoin adoption might mean the centralizing forces of large on-grid mining
operations and ETFs.
But the amazing irony is that in Africa, Bitcoin's technology arc is making the currency more
and more decentralized.
As the network eats more and more off-grid cheap electricity at dozens of completely
separated sites, it becomes harder and harder to shut down.
And as the network adds more and more self-custodial users on potentially millions and millions
of SIM cards, it becomes more and more unstoppable.
As Lynn Alden describes in her book, Broken Money, up to this point modern monetary technology
was inexorably centralizing as it became more digital and more advanced.
Bitcoin breaks this trend and Africa helps Bitcoin break it.
And as Africa helps Bitcoin, Bitcoin helps Africans.
KG says that some Machankura users started with feature phones and then, after getting
involved in the Bitcoin economy, bought themselves a smartphone.
They are pulling themselves into the internet using Bitcoin.
And others through Gridless are pulling themselves into electricity using Bitcoin.
Together, they are moving into the future.
5.
Bridging the gender gap.
There are 700 million African women.
All of them, according to Marcel Lorraine, could one day be Bitcoin users.
Marcel, a Kenyan entrepreneur and social activist, has made it her life mission to onboard the
women of Africa into a new currency system that they, not their husbands, can control
and that can meaningfully improve their own freedom.
Her journey began in 2018 when she was doing a gig in Nairobi and struggling with her finances.
She was running Lloris, her company that consults for corporate and social events.
She would save her earnings, she says, but the end of the year have less and less to
show for it.
The government, she says, kept raising taxes, and her only option was to save in a shilling
bank account which kept depreciating rapidly.
For context, while not as weak as the Quacha, the Kenyan shilling depreciated 21% against
the dollar in 2023, which itself also depreciated against goods and services.
In the end, Kenyans are getting at least 25% less stuff for their wages than one year ago.
At the gig, Marcel heard about cryptocurrency and decentralized finance.
Can I be paid in that?
She asked herself.
To save me from the hassle of fees and inflation?
At that time, she said, there was a ridiculous amount of hype around blockchain in Kenya.
There were tons of scams and tons of promoted events around different tokens.
During that time, there were no educational hubs or groups.
You'd show up at an event and hope it wasn't pitching a scam.
I invested in a variety of tokens, she says, including Bitcoin.
I made money.
I lost money.
It was frustrating.
During the COVID pandemic, she couldn't do event production, so she was day trading
shillings and dollars.
She decided to focus on Bitcoin because she didn't have time to study more than one type
of investment.
And besides, as she says, it is the mother of digital currencies.
In 2022, Marcel helped organize the first post-pandemic Bitcoin event in Kenya in April
at an Nairobi hotel at a conference room full of Bitcoiners.
These included local educators Rufas Kamu and Master Guantai, and even Pakodela India,
who was passing through on his journey to travel the world using only Bitcoin.
At that event, Marcel noticed a problem.
There were a lot of men, but only two women, and she was one of the two.
She had noticed that crypto and blockchain events had a gender gap, perhaps only 30%
women, but 98 to 2 for Bitcoin?
We could do better, she said.
So she reached out to a few female friends, who told her that they were afraid to go
to Bitcoin events because the environment felt male-dominated.
Okay, fine, she thought.
There's a problem, and I can make a solution.
Marcel created Bitcoin Dada in 2022 as a safe space for girls and women to learn about
financial freedom.
The first cohort was held in May, with 20 people, just her circle of friends.
Ever since, she has run online classes every Tuesday and Thursday at 9pm.
At first, it was just Kenyan females.
In the second cohort, they had 40 students.
Each cohort is 6 weeks long.
Now she says, they have held 5 cohorts, and more than 300 women have gone through the
course, with a total of 130 graduates.
All of them now have a solid understanding of Bitcoin.
They know how to self-custody, and buy Bitcoin with no KYC via cash trades.
On our way through Nairobi, I watch as Marcel effortlessly uses BitNob and Machankura to
buy Bitcoin with M-Pesa, and then send Bitcoin without using any data.
I think of how many people on Wall Street or Silicon Valley would be blown away by this
feat, which she makes look so simple.
Marcel normally suggests a range of wallets in her course, including the self-custodial
Moon and Phoenix, and the custodial wallet of Satoshi for small transactions.
For on-ramps, Marcel typically recommends the Nigerian-founded BitNob app.
M-Pesa, like everyone in Kenya, have M-Pesa, and use BitNob to swap that for Bitcoin,
and then withdraw to, for example, a Moon wallet.
Kenya is much more developed than Malawi, but many smartphone users still don't have
consistent data, rendering Machankura a key tool.
For the main curriculum, Marcel uses the MePremiere Bitcoin book, originally created in El Salvador,
and then she walks students through practical examples of why it's important for African
females to become Bitcoiners.
Back in 2022, Marcel first heard about the Africa Bitcoin Conference.
The Austrian educator Anita Posh approached Marcel and asked if she was going.
No, Marcel said, it was too expensive.
But Anita insisted and helped organize a fundraiser and contributed half while the community covered
the rest.
On her visit to Accra in December 2022, Marcel was inspired by what the conference organizer
and Toghly's human rights activist, Farida Nabaremah, had created.
In 2023, Marcel came back to the second edition of the conference with four ladies, and Bitcoin
data helped two female-led teams enter the event's hackathon.
Marcel now offers a mentorship program, which helps the ladies speak in their own capacities,
whether on social media or at events like ABC, to help them tell their own stories.
On the ground, Marcel visits universities and runs trainings for women and men together.
Students are vulnerable because they are often targeted by scams.
She describes the obscene links that Worldcoin went to to try and sucker students into buying
and trading their token in Kenya.
Bitcoin, she points out, has no similar marketing budget.
Teaching and training the youth, she says, is underfunded and vitally important.
Every single person that attended one of her events at a university recently had been targeted
by Worldcoin, a brutal reality.
Marcel's goals are to streamline data's mentorship program so that they can match talent
and skill for Bitcoin companies, to help get women hired in the space, and also to expand
to different countries.
Several of her mentees have already earned jobs or fellowships in the Bitcoin ecosystem,
at organizations like BTrust or ABC.
She says they now have 30 active alumni in Uganda now, and more in Nigeria, South Africa,
and Tanzania.
For me, Marcel says, Bitcoin gives us back our voices.
It's hard being African, and harder being an African female.
This gives us financial independence, and an opportunity to work on ourselves.
Marcel has long supported one particular school in Nairobi's Kibera, the largest urban slum
in Africa.
She has personally seen Bitcoin help people escape.
She knows it can help get many, many more, but the hard work needs to be done.
Her mission seems a tall order, going from what is now probably just a few thousand African
female bit coiners, to tens of thousands, hundreds of thousands, millions, and eventually
hundreds of millions.
If I don't do this, says Marcel, then I would have failed my sisters.
This is thought to be a man's thing, so women can get financially abused.
I don't want to leave the women behind.
Bitcoin, she says, gives away out of macro problems like currency devaluation, and micro
problems like repression inside the home.
A lot of foreign aid, she says, doesn't make it to the slums.
Bitcoin helps, because it makes sure the money gets directly where it needs to be.
We eliminate the waste and corruption.
On my last night in Nairobi, I meet Felix, a local Bitcoin entrepreneur.
Like many others I met, he's now running a Bitcoin business, in his case selling merchandise,
and is earning in Satoshi's.
He explains how the lightning integration at Binance has been huge for Kenyans, and
now they can interface with Wallet of Satoshi, Phoenix, Machankura, and other apps instantly
with very low fees.
He says how Binance P2P is also being used widely to trade from M-Pesa to Bitcoin.
I asked him about Marcel, and he raves about her work.
He says that it's essential to get women involved in Bitcoin adoption, and that Marcel
is doing God's work in this area.
She is, he said, bridging the gap.
6.
Women Producers, Not Consumers
Bitcoin mining might help provide electricity to millions of Africans, but if the proceeds
aren't spendable in the local economy, and usable by all citizens, then it's just a
partial revolution.
If one challenge for popular Bitcoin adoption in Africa is the lack of internet, and another
is low use among women, then another, according to Femi Longue, is breaking the cycle of dependence
on the West.
Femi is a Nigerian social entrepreneur, with 20 years of experience mentoring African technologists
and startup founders, and played a key role in creating and running the two most important
tech hubs in Nigeria and Kenya.
In 2022, he was hired to lead Kala Fellows, an initiative from Tim Akinbo, Carla Kirk-Cohen,
Bernard Para, and Abukar Nur-Kalil, to accelerate the process of moving African computer engineers
into contributing to the Bitcoin ecosystem.
Last year, Kala was acquired by B-Trust, the charity founded by Jack Dorsey and Jay Z to
support Bitcoin infrastructure in Africa and the global South, and renamed B-Trust Builders,
where Femi now sits as director.
He is focused on helping Africans move up the value chain in Bitcoin, rather than just
being consumers, like Africans are in so many ways in the existing global financial system.
He wants them to be producers in the new Bitcoin economy.
Femi says there are two legs to this journey.
First, getting Africans more involved in protocol and infrastructure discussions.
As Jack Dorsey says, if Bitcoin is going to be money for the world, it has to be made
around the world.
Femi says that African views will be needed to help evolve Bitcoin to its true potential.
We can already see evidence of that in Machankura's product roadmap, which could help decentralize
and strengthen Bitcoin by creating potentially millions of more self-custodial users, and
gridless work, which makes mining more censorship-resistant and robust.
The second leg to the journey, Femi says, is creating Bitcoin tools and applications
that help Africans improve their quality of life in the context of their own community,
city, and country.
Femi says that these are early days.
In 2022, when Kuala participated in the hackathon around the first Africa Bitcoin conference,
they struggled to attract participants.
People were just dipping their feet in, said Femi, but in 2023, he said the influx of talent
was impressive.
One winner was BitPension, a startup aiming to allow anyone in Africa to set up a BTC-denominated
pension where anyone can buy satoshis in small amounts every day, which go into a time lock
self-custody so that you can't betray yourself.
Today's pensions, Femi says, could easily rug you, or they could be investing in oil
or weapons companies.
BitPension, or a similar idea, could be game-changing.
The company won $5,000 of BTC and is currently building a minimum viable product.
Femi also pointed out Splice, another hackathon entrant, which is leveraging local communities
of mobile money agents to facilitate dollar-stabilized trades over lightning using taproot assets.
Femi says that the Western mentality around Bitcoin is too focused on the savings aspect
and not enough on the medium-of-exchange part.
In his view, this overemphasis on savings slows down the adoption and cements fiat currency
as the on-ramp to Bitcoin.
A lot of the work that needs to be done is not just teaching people how to save, but
also sitting down with local ride-share apps, for example, and showing them how they can
add native Bitcoin payments.
The only way we can get out of the broken currency system is to build a new one, he
says, to leave the old one entirely behind.
Consider the average person's day, says Femi, and ask, what are all the touchpoints where
they are going to interact with money?
Now, how do we put Bitcoin at any one of them?
How do we help create options for them to spend the Bitcoin that they earn?
If they don't have those options, Femi says, they remain part of the exploitative fiat
system.
The more merchant services we have, he believes, the more goods we can buy and the less interest
there will be in the conversion to USD aspect.
If we don't get merchant adoption, he says, we are stuck in the past.
Another insight Femi has is that wallets will be in the future features, not core products.
Where you keep your coins is important.
More important is what you can do with them, he says.
There will be, he says, pension solutions, international trade settlement solutions, payroll solutions.
Currently, a lot of these services are disconnected from wallets.
Eventually, those will be built in.
Something else Femi is focused on is helping Africans build strong narratives.
He points to the fact that there are no Bitcoin books written by Africans.
We need to tell our stories and document our experiences, he says.
There is a strong narrative about what Bitcoin is and who it is for, he says.
A lot of people who are using Bitcoin in their daily life beyond savings do not know how
to or aren't very good at explaining this to others, or they may not want to alert the
authorities.
For example, he points to Nigerian importers who don't want the state to know they are
paying in Bitcoin.
The government, for its part, has instructed any bank to freeze accounts that are involved
with Bitcoin or cryptocurrency.
When people see Nigeria as a top 10 country for Bitcoin adoption, they say, there are
so many hodlers in Nigeria.
No, Femi says.
A lot of these folks don't even have a wallet.
They just need to get funds to China tomorrow.
They send Naira to some guy who does the transfer.
Bitcoin is beginning to change the fabric of international commerce, but nobody knows.
Partly, it's because people don't want others to know about the details.
But partly again, it's because there is no investment into a platform to help people
tell their story.
The Bitcoin ecosystem, he says, isn't doing the work to counter what the IMF might be
saying.
There is very little empirical data on adoption, which according to Femi could really help with
policymakers.
One contact of his in the Nigerian government told him, I need something to convince me
that this makes sense, that it's not just handing power from one group of white guys
to another.
There isn't enough work being done either, Femi says, to help people avoid scams and
token schemes.
This hurts the individual, and it hurts any government looking to innovate.
Looking at Central African Republic, he says, they tried to follow El Salvador, but a bunch
of scammers with Sango Coin got to them first.
To move forward, I think we need to write books, Femi says.
That's scary for a lot of us because we haven't done it before.
We don't know what the process is.
He says that 16 or 17 years ago, he wanted to read a nonfiction book about Africa written
by an African, and it was very hard to find one.
Africa Unchained by the Ghanaian economist George Aite was one of the first he saw, but
there were not many others like it.
The problem is now, according to Femi, spilling over into the Bitcoin space.
What his fellow B-Trust leader Abubakar Nur Khalil is doing with his Forbes columns is
great, he says, but we need books and mentorship about how to get there.
Femi thinks a lot could go wrong.
He is wary of the power of Bitcoin billionaires as the currency continues to grow at scale.
As an African, he says, we have seen that Bill Gates might have good intentions, but
his foundation has massive influence on health care policy on the continent at the moment.
Zuck may be great, but again, his corporation has huge influence here.
So there's part of me that's afraid that even if the system is decentralizing, in
a hyper-Bitcoinized world, there will still be people with outsized power.
The real promise of Bitcoin is that everyone should have a fair shot.
The world we live in is broken.
The gap between the richest and poorest in every country has never been wider.
Replicating these same imbalances in the Bitcoin world would be a failure.
Despite this concern, Femi says that Africans cannot afford to stay on the sidelines.
Bitcoin, he says, is inevitable and is already happening around us.
He thinks it could change the existing global monetary system.
What happens in Africa, he says, affects the way black people are treated everywhere in
the world.
Bitcoin is an opportunity to redefine the power system and power structure.
His hope is that when Bitcoin achieves its full potential, Africa's place in the world
will be different, independent and not dependent.
I hate being from the continent that everyone just wants to help, he says.
But the only way Africa truly benefits from the Bitcoin revolution, he says, is if Africans
lead the way.
The hope I have, he says, is not inevitable.
We have to make it happen.
7.
A Glitch in the Matrix
In Kenya, I got the chance to hear the origin story of Gridless from Philip.
Ten years ago, he and Eric were discussing the Turkana Wind Farm, a huge 400 megawatt
project built in Kenya that had no customers for years.
The government had to pay 9 to 10 cents per kilowatt hour for nothing.
This was because the architects wouldn't build the site without a guaranteed income
flow from a government or anchor client.
The situation is common, a take or pay contract.
The worst part, Kenya has a lot of cheap geothermal power, but oftentimes it is actually kept offline
because the government is already on the hook to pay for the expensive wind power.
Eric and Philip watched this unfold and thought, what a disaster.
They also thought, how could we address this?
What's a power user that doesn't need a lot of connectivity?
That's location agnostic.
Initially, they thought about bringing an aluminum processing plant up to Turkana, but the logistics
challenges were overwhelming.
Then they thought about a data center.
Better, but the internet wouldn't be good enough, they thought.
Finally, the Eureka moment.
Bitcoin could fix this.
They laugh at how well they might have done if they had taken that risk a decade ago.
Of course, it was early days back then.
And mining at Turkana was an idea just a bit too crazy to leave their existing jobs for.
It wasn't until 2022 that they finally got everything in place to make gridless happen.
For many Africans, Bitcoin is a dual revolution, allowing communities to utilize stranded energy
and at the same time, giving them access to a parallel global economy based on property
rights, not borrowing from abroad with strict conditions.
In the modern financial system, countries like Kenya, Malawi, and the DRC must obtain
dollars or euros to buy planes, industrial equipment, fertilizer, oil, or even to pay
back debt.
Bombardier is not going to accept Quacha for payment.
And printing Quacha to buy dollars is not an option.
It crashes the local currency.
So policymakers must focus on making stuff that the US or Europe or China wants instead
of what the country needs.
Only then can they earn dollars to be able to advance as a nation.
It doesn't always have to be this way.
If Bitcoin becomes a bigger and bigger piece of the global economy, African nations will
be able to transform their energy into a global reserve currency without asking permission
from or doing business with any empire or far away power.
The relative amount of Bitcoin might not be huge, all things considered, but economics
is all about the margins, where it could make a big difference.
Today, Africa has 45 currencies.
Intercontinental business is plagued by delays, bureaucracy, and rent seeking, especially
from abroad.
As of late 2022, 80% of all inter-African payments were processed by a European or American
company.
But in a Bitcoin world, Africans could trade with each other without paying what is essentially
a tribute tax to former colonial powers.
There would be no global rent seeking as someone in the DRC trades with someone in Kenya.
It could be a truly peer-to-peer transaction.
It's hard to say, of course, if things will transpire in this way, but all revolutions
start small and grow.
Today, individuals in Eastern Africa can already easily connect with their peers elsewhere
on the continent in minutes or seconds, in a way that does not unduly benefit the West.
Fundamental technologies like the plow, metallurgy, the steam engine, airplane, and the Internet
have advanced civilization beyond the wildest dreams of our ancestors.
People today without question live longer and healthier lives than we did 1,000 or 5,000
years ago.
That's not to say it's always been positive.
Colonialism, tyranny, slavery, the subjugation of women, and war remain scourges on the planet.
One wonders what might come of a monetary revolution on par with the biggest inventions
in human history.
Morally speaking, it is hard to argue for today's system where approximately one billion people
enjoy a globally accepted, freely tradable reserve currency, and seven billion earn wages in strictly
inferior monetary technologies.
The dominant currency is rescued at times by tactics like aggressive interest rate hikes
that crush more than 150 other weaker currencies, depleting the wages of billions of people.
Politics and markets have both played a role in creating this currency-cast system, and
left alone, it seems it might only get more and more brutal, with peripheral currencies
getting weaker and weaker, and dominant ones becoming more and more widespread.
When the West suffers a financial collapse, ironically, people flock to the dollar.
Where you are born should not determine the quality of your wages, and yet it does.
Until now, Bitcoin is, without exaggeration, something like a glitch in the matrix, something
that the current system did not expect and cannot process.
If it continues to grow and expand, it will eventually take away the currency devaluation
option that governments in Malawi and so many other places exercise to keep their corrupt
operations afloat.
They will have to resort to other options, higher taxes, or reduced government spending,
but they will no longer be able to perpetrate mass theft at the press of a button.
Three years ago, inspired initially by the 2020 Stone Ridge Shareholder Letter written
by Ross Stevens and confirmed by interviews with various Bitcoin miners, I wrote about
how Bitcoin would help bring a lot of new renewable power online in Africa, but I had
no idea at what scale, until I started to visit some of the gridless sites, and I had
time to think carefully about the implications, which are truly staggering.
For example, instead of a government trying to build power infrastructure by reckless borrowing,
selling off equity to foreigners, cutting fiscal expenditures, or raising taxes, why
not just design a strategy around mining Bitcoin?
Then you could send a team of researchers to map all the states, like Lake Navacha,
figure out the total wasted electricity at existing power generation sites, figure out
how many ASICs they could integrate, plot the income, and then take one last fiat loan
from the IMF or an international creditor.
As the years go by, the fiat payments to the IMF would get overshadowed by the appreciating
capital from the Bitcoin mining operations.
Eventually, they could be debt-free.
One also can't help but wonder about the fleets of older ASICs, no longer very profitable
with expensive Western electricity rates, but perfectly functional with the cheap or
free power being unlocked in Africa and the global south.
They could, and likely will, be a boon for off-grid miners in countries like Malawi.
Here's another thing.
Other events, trade wars, and financial crises might make energy very expensive in the West,
where miners might have to shut down in America or Europe.
But off-grid in Africa, this drama is irrelevant, and can mean even more Bitcoin for the local
miners.
It's not just what Bitcoin can do for Africa.
It's what Africa can do for Bitcoin.
If companies, and one day soon, nation-states and corporations, start converting the continent's
thousands of gigawatts of wasted and untapped hydro and geothermal and biomass energy into
capital, feeding all of that electricity into the Bitcoin network across a decentralized
and disconnected grid system, then we have a much more unstoppable global currency.
The kind of off-grid mining that makes economic sense to scale out across Africa can decentralize
Bitcoin and make it stronger.
Similarly, if the hundreds of millions of mobile money users of today never actually
get a bank account, but just move from M-Pesa to Bitcoin using their SIM cards through a
service like Machankura, the network becomes much more resilient.
I asked Eric and Philip about the time it would take for Bitcoin to start to truly transform
the continent.
Eric said that within 30 years, mining will help increase electricity access in Malawi
from 15% to close to 100%.
Philip said that Africa could, with Bitcoin's help, reach Northern Europe's per capita
electricity consumption by the end of the century.
But both agreed, Bitcoin adoption as a medium of exchange might happen much, much faster.
For hundreds of millions of people, it may not in the end be the United States or Bill
and Melinda Gates or the World Bank that bring them into the 21st century, but an open source
software network with no known inventor and controlled by no company or government.
For dozens of brilliant African entrepreneurs, this is the vision, and in a time where so
many are jaded about the world around them, it's a refreshing one.
The big problem that keeps us going every day, says Eric, is the number of people who
lack electricity on this continent.
It's impossible to comprehend.
Picture 1,000 people without power, he says.
Now 10,000.
Now 1 million.
Now 600 million.
You can't.
It's so egregious and unfathomable.
And without power, there is no freedom.
But now we can fix this problem and make money all at the same time.
And that's a wrap on this Bitcoin Out Loud episode of the Bitcoin Podcast.
If you are a Bitcoin-only company interested in sponsoring another fucking Bitcoin podcast,
head to bitcoinpodcast.net.
You can find me on Noster by going to primal.net slash walker.
And if you want to follow the Bitcoin Podcast on Twitter, go to At Walker America or at
TITCoin Podcast.
You can also find the video version of this podcast at youtube.com slash atwalkeramerica
or at Walker America on Rumble.
Bitcoin is scarce.
There will only ever be 21 million.
But Bitcoin podcasts are abundant.
So thank you for spending your scarce time to listen to another fucking Bitcoin podcast.
Until next time, stay free.