Bitcoin mines need power to run. Even small mines can run profitably if the power is cheap.
And in this case, the power is free from unexploited renewable resources.
Greetings and salutations, my fellow plebs. My name is Walker and this is the Bitcoin podcast.
It's Saturday, September 30, 2023. The Bitcoin block height is 81058,
and the value of one Bitcoin is still one Bitcoin. Today's episode is a Bitcoin out loud read.
On yesterday's Bitcoin news roundup, I read a snippet from an article published on MSN.com,
titled, The Surprising Simple Answer to Africa's Rural Energy Problems, Bitcoin Mining.
I decided that this article is actually worth reading out loud for you in full, not only because
it's a solid article that articulates the benefit of Bitcoin mining in Africa very well,
but also because it was published on a legacy media site. I'm glad we're seeing the Overton
window for Bitcoin mining shift, as more people realize they may have been misled by the anti
Bitcoin propaganda of the New York Times, Greenpeace, and Digiconomists to name a few.
You can find all the links and accounts mentioned in this episode via the article
version of this show linked in the show notes or by going to BitcoinPodcast.net slash words.
And of course, you can always watch the Bitcoin podcast on Rumble or YouTube,
or listen on fountain.fm or wherever you get your podcasts. If you do listen on Fountain,
consider giving this show a boost or creating a clip of something you found interesting.
For those that have boosted this show already, or zap me on Noster, thank you very much.
Moving forward, I'll accept questions, topics, or general funny comments from the top boosts
I receive on fountain. And if you haven't checked out found yet, I highly recommend it.
You can send Bitcoin to your favorite podcasters who you find valuable and also earn Bitcoin just
for listening. Without further ado, let's get into today's Bitcoin Out Loud Read. It's titled
The Surprising Simple Answer to Africa's Rural Energy Problems.
Bitcoin Mining by Steven Sidley
Small Bitcoin mines can be immediately profitable and can therefore fund a renewable
mini grid and supply power to the community at no cost. And if this seems too good to be true,
it gets even better. First, some numbers. And they are pretty shocking. According to the
International Energy Agency, 600 million Africans, 43% have no access to electricity.
Neither are they likely to get access to electricity. Why? Because it is expensive to erect pylons,
string cable, and build substations to distribute electricity to small communities or villages in
the far flung areas. The CAPEX costs overwhelm the return, especially given the light demand
in areas without industrial activity of any kind. This means that the only way to electrify those
areas is with mini grids powered by renewables, usually between 20 kilowatt and one megawatt,
depending on the size of the community. But here too are many challenges. A recent paper
by the Green Africa Mining Alliance lays out the scale of the task. Quote,
The number of mini grids in Africa needs to grow from 3,100 in 2021 to 160,000 in 2030,
more than 50 times over nine years, with a cumulative investment of $91 billion by 2030.
If the current pace of mini grid development continues, only about 44,800 mini grids will be
installed by 2030, serving only around 80 million people in Africa. We first have to recognize some
of the economic peculiarities of renewable mini grids in rural areas. One is that community demand
peaks from six to 9pm when the sun goes down. So the grid has to be overbuilt to handle that
critical period. While consumption is likely to grow over time, as energy consuming businesses
start to cluster around the available energy, the initial period of the build and deployment
is at the apex of financial risk, with high upfront costs to satisfy community peak demand,
and then a long and unpredictable wait for new business customers to come onto the grid and
pay for it. Commercially minded investors take one look at this equation and quietly leave the room.
This means that the only way to electrify these underserved communities is to rely on development
slash aid institutions or governmental universal access programs to fund renewable powered mini
grids. But sadly, most governments in Africa do not have the fiscous nor will nor execution capacity.
Most development institutions are both stretched across many demands and extremely slow to move
from aspiration to funding. Worse, they are often subject to the whims of politics. In short,
whatever help is coming to these communities is nothing more than a dribble, consigning hundreds
of millions to lives of exclusion. It is no surprise that many of the mini grid initiatives
promised on paper for decades have simply withered on the vine. An answer. There is a solution to all
of this and the calculus is simple. The first piece of the calculus is that rural communities
are often close to rivers, a critical natural resource for poor, underserved, underemployed,
and mainly subsistence communities. Additionally, Africa benefits from an abundance of sunlight over
most of the continent. Two rich renewable energy resources almost entirely stranded and unused,
solar and hydro. The critical second item of the calculus is the lack of an anchor tenant
who will buy electricity reliably and hungrily, such as a large industrial plant. Sadly, such
businesses have no reason to come to these places. So what is going to use the stranded renewable
energy and happily pay for the renewable mini grids from flowing water and abundant sunlight
powering up surrounding structures with lights and TVs and ovens and chargers?
Bitcoin mines. That's what Bitcoin mines need power to run. Even small mines can run profitably
if the power is cheap. And in this case, the power is free from unexploited renewable resources.
A single container of computers running Bitcoin mining software can be profitable
because the only real cost is electricity. The other costs, the machines, the air conditioning,
the cables, the solar panels or water turbines are negligible by comparison. Small Bitcoin
mines can be immediately profitable and can therefore fund a renewable mini grid and supply
power to the community at no cost. And if this seems too good to be true, it gets even better.
The Bitcoin mines can reduce their consumption at the flick of a remote switch,
making them perfect load balancers for the 6 to 9 p.m. spike or any other reason.
Why does this seem like magic? Because stranded energy demand requires the transport of power
to population centers to find a consumption market, both citizens and industry. It is they who pay for
the electricity which funds generation and distribution. This is the way it works, even
for big renewable projects. Their electrons end up mainly flowing to the population centers.
But Bitcoin mines are happy to churn away, far from cities and towns, quietly securing
crypto transactions and producing revenue. Bitcoin mines are unlike any other industry.
They can live anywhere. And if the energy is stranded, uncontested and free, you have a
perfect marriage where everyone benefits. The community, the investors, even the Bitcoin bros.
Unlike any other buyer of electricity, Bitcoin mines are a buyer of first resort
when no one else is buying, a buyer of last resort when there is no other demand,
and a grid balancer of last resort keeping the grid stable at all times. No other energy consuming
enterprise has this profile. Bitcoin mines have been slowly moving into this space,
with multiple projects underway with companies like Bitcoin Lake in Rwanda and Gridless in Nigeria.
It can only accelerate. They are extremely fast to set up and face fewer regulatory hurdles than
larger renewable initiatives which feed into the national grid. This is a delicious irony,
given the number of furious and outraged column inches dedicated to Bitcoin's energy usage over
the past couple of years, when in fact, it is likely to be part of the solution for the rural poor,
excluded and energy deprived.
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.com. If you want to follow the Bitcoin podcast on
Twitter, go to at-titcoin podcast and at-walkeramerica. You can also find the video version of this
podcast at youtube.com.com.com. And at-walkeramerica.com 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.