Located just a few hours northwest of Nairobi, Kenya, lies a unique bitcoin mining operation. A small group of miners has set up shop near Hell’s Gate National Park, nestled at the edge of Lake Naivasha. Their mining operation, powered by renewable energy, is run by a startup called Gridless and is one of the first of its kind in Africa.
Gridless, a Kenyan Bitcoin Mining Company, Raises $2M in Funding Led by Jack Dorsey – https://t.co/JjhZr8O92j https://t.co/Cw2iEu4vGS
— Joseph Muongi (@JosephMuongi) December 13, 2022
Gridless is transforming the way bitcoin mining is done, using a combination of solar power and geothermal energy sourced from a nearby geothermal plant. The site is modest, consisting of a 500-kilowatt mobile container resembling a small residential trailer. Yet, this innovative facility is part of a larger mission that spans across Kenya, Malawi, and Zambia, where Gridless operates six mining sites, all harnessing renewable energy to decentralize and secure the bitcoin network.
Decentralization: A Core Feature of Bitcoin Mining
When we think of bitcoin, the first thing that usually comes to mind is the cryptocurrency itself—the price fluctuations, how to use it as a store of value, or even a means of payment. However, as Gridless CEO, Erik Hersman, explains, these things are only possible through the hard work of miners who run distributed, energy-hungry machines to validate transactions and create new bitcoins.
“That doesn’t happen without bitcoin miners and us being globally distributed,” Hersman said during a visit to the Kenyan site.
Bitcoin’s decentralization is one of its key features, ensuring that no single entity controls the network. This makes it resistant to shutdowns, even if governments or authorities attempt to intervene. Bitcoin is created through a process called proof-of-work, where miners worldwide run high-powered computers to secure the network and validate transactions. Given the energy-intensive nature of the process, miners are constantly searching for the cheapest and most sustainable sources of power.
A Volatile Industry with High Stakes
Bitcoin mining is a volatile business, heavily influenced by the price of the cryptocurrency. After a significant drop in 2022, bitcoin’s price surged to a record high above $73,000 in March 2024. Much of this increase was attributed to the launch of bitcoin exchange-traded funds (ETFs) and the optimism surrounding Bitcoin’s “halving” events – an occurrence that reduces the reward for mining bitcoin, thus slowing the creation of new coins. Historically, halvings have been followed by significant price increases, making bitcoin mining an exciting yet risky venture.
The industry is also growing rapidly. According to analysts, the geography of crypto mining is shifting. The U.S. currently leads global mining operations, but regions like Africa, Latin America, and the Middle East are attracting more miners due to their lower energy costs. This shift is creating opportunities for countries with abundant renewable energy resources, like geothermal, solar, and hydroelectric power.
A Geothermal Future for Bitcoin Mining in Africa
Hell’s Gate, an area with an active geothermal plant, is a perfect location for this type of energy-intensive operation. In the past, the land was known for its violent volcanic eruptions, but today, it’s home to a network of geothermal power stations that supply abundant energy. This energy is now being used to power bitcoin mining machines, turning once-wasted geothermal power into a valuable resource.
Africa #Bitcoin Conference 2022 🇬🇭@jack talks about securing the Bitcoin Network via #Bitcoin mining initiatives by @blocks in Africa following the $2 million funding announcement for @GridlessCompute pic.twitter.com/0BMi5xIqbS
— BitKE (@BitcoinKE) December 6, 2022
Gridless has tapped into this energy to mine bitcoin. However, using geothermal energy for mining is not a new concept. Countries like Iceland and El Salvador have also utilized geothermal power for the same purpose. For the operation to be successful, it requires a mix of local support, affordable energy, and infrastructure—and that’s exactly what Gridless has found in Hell’s Gate.
Africa has an incredible wealth of renewable energy potential, with an estimated 10 terawatts of solar capacity, 350 gigawatts of hydro, and 110 gigawatts of wind energy. However, much of this energy remains untapped due to the high cost of building the necessary infrastructure. With the arrival of bitcoin miners, there’s now an economic incentive to harness and distribute this otherwise stranded energy.
Bitcoin mining, despite its reputation for consuming massive amounts of power, can help unlock these renewable energy sources. Miners like Gridless essentially act as large-scale energy buyers, creating a financial incentive to expand energy production and infrastructure. This energy, once wasted, can now be harnessed to power not only mining machines but also local communities.
Impacting Communities and Accelerating Energy Access
Gridless’ mining operations are more than just a business – they’re changing the landscape of energy access in Africa. Their mining sites have already powered over 8,000 households across Kenya, Zambia, and Malawi. The company is also providing electricity for cold storage containers for farmers, battery charging stations for electric motorcycles, and public Wi-Fi points.
How Gridless Manages #Bitcoin Mining in #Africa via its Own Softwarehttps://t.co/3vjAPh0o2W
— ₿itcoin Xoe 🇭🇹 (@Bitcoin_Xoe) February 17, 2024
In areas like Kenya, where access to reliable electricity can be limited, Gridless’ efforts are making a direct impact. By tapping into renewable energy resources that would otherwise go unused, the company is helping to electrify rural communities while simultaneously securing the bitcoin network.
Bitcoin Mining as a Catalyst for Growth
While the bitcoin mining equipment itself might seem unremarkable – a container full of machines running complex algorithms – its impact is far-reaching. The process helps secure the global bitcoin network, which, as Hersman explains, is crucial for the future of decentralized finance.
“It’s not really sexy,” he says, “but it’s actually what secures the network.”
For the people of Africa, however, the benefits are tangible. With the increasing presence of renewable energy projects, and companies like Gridless leading the way, the potential for a decentralized and sustainable energy future is within reach. As the global demand for bitcoin continues to rise, Africa’s abundant renewable resources may play a crucial role in shaping the future of the cryptocurrency industry.
In the end, bitcoin mining isn’t just about creating digital currency; it’s about unlocking untapped energy and providing sustainable power solutions for communities that need it most. For Gridless, this is just the beginning of a renewable-powered future for both Africa and the global bitcoin network.
