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Ethiopia has signed a memorandum of understanding with Data Centre Service, a subsidiary of Hong Kong-based West Data, to construct a $250 million data mining infrastructure project within the country.
Data centers provide the necessary facilities to host large-scale Bitcoin mining operations. This development in the East African nation follows a trend of Chinese crypto mining firms relocating to Ethiopia after the Chinese government implemented a sweeping crackdown on the industry in 2021.
While Hong Kong, a semi-autonomous region of China, has adopted a more welcoming stance toward cryptocurrency, the two governments remain closely linked.
Ethiopian Investment Holdings announced the agreement on LinkedIn yesterday. However, the company subsequently removed details regarding the deal’s value and the counterparty from the post, as reported by Reuters.
#Ethiopia makes data center deal with #Hong_Kong company, may start mining
The Ethiopian government has entered into a partnership with a Hong Kong data center operator. According to reports, #Bitcoin mining will be among the activities the sides develop together.
State-owned… pic.twitter.com/Q5UdLC33aW
— Addis Standard (@addisstandard) February 16, 2024
The agreement also aims to promote artificial intelligence training across Ethiopia.
Miners Embrace Ethiopia
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Ethiopia began attracting miners in 2022, although cryptocurrency trading remains prohibited. Operations establishing a presence in the country can benefit from reduced energy costs, an incentive that becomes particularly appealing ahead of Bitcoin’s upcoming halving event on April 19.
The halving is a quadrennial event predetermined in Bitcoin’s code, during which miners’ Bitcoin rewards are cut in half. This reduction forces the largest operations to upgrade and expand their mining capacity to remain profitable. Historically, the resulting global supply squeeze has driven up the price of Bitcoin.
Many miners view Ethiopia as an attractive location due to favorable government policies and lower energy costs, supported by an abundance of hydroelectric power and other renewable energy sources.
The Grand Ethiopian Renaissance Dam has recently increased Ethiopia’s generation capacity to 5.3 gigawatts, with 92% of that capacity derived from hydroelectric sources.
In a Bloomberg report last week, a senior executive at Bitmain, a leading global supplier of mining hardware, stated that Ethiopia could soon rival Texas’s generation capacity within a few years, given the numerous electricity generation infrastructure projects currently underway.
Texas is the global leader in Bitcoin mining operations, accounting for 28.5% of the US hash rate—a metric indicating the total computing power devoted to Bitcoin mining worldwide. The United States as a whole accounts for approximately 40% of the global hash rate.
The post Ethiopia Partners with Hong Kong Firm for $250 Million Crypto Mining Data Center appeared first on Cryptonews.
