Tesla CEO Elon Musk recently announced that the company would be accepting Bitcoin as a payment method for products before retracting the statement and stating that it would no longer accept the same over climate concerns “We are concerned about rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”. Both moves by Tesla are testament to the growing credibility and usage of cryptocurrency but also the concerns over the effect of cryptocurrency mining on the environment.
Crypto climate change impact has attracted scrutiny for a long time. Bitcoin mining for instance consumes more energy per annum than several East African Countries combined and emits more emissions than Argentina and presumably several African countries. Mining of a cryptocurrency is a process through which a miner verifies transactions by solving complex mathematical equations using computers. The process is energy intensive -this at a time when Environmental, Social and Corporate Governance (ESG) issues are a major consideration in investment decisions. But cryptocurrency is also a Trillion dollar opportunity – and that is where Kenya, and other African Countries, can come in.
cryptocurrency is also a Trillion dollar opportunity – and that is where Kenya, and other African Countries, can come in
A number of resource rich African countries sustain their economies on mining activities – and perhaps they should consider the new generation mining – solving complex mathematical equations rather than burrowing through the earth. Kenya is poised to be a leader in cryptocurrency mining because of its clean energy production potential. Kenya hosts The Lake Turkana Wind Power Project, the largest wind power generation project in Africa. The geothermal energy production capacity also holds great potential. The household electricity consumption is low compared to other countries which could mean that, absent lowering of prices, consumption for increased power production may need to be channeled to a more electricity intensive production unit – and currently there is almost nothing that can compare to cryptocurrency mining’s consumption of electricity. If not investing in turning the mining of Bitcoin Green, it could also be a chance to come up with Green Cryptocurrency.
Apart from the Financial discussion on potential profitability of investing in our cryptomining capacity as a country, we need to be alive to the disproportionate impact that climate change has on developing and under developed countries. Climate change for instance leads to extreme weather events that greatly affect, among other things, food safety in agriculture dependent societies. Droughts and floods are not a new issue in Kenya. However, some of the arid and semi-arid areas which have increasingly lost their agricultural capacities also lend themselves to clean energy projects such as the Lake Turkana Wind Power Project. It is in our best interest to be involved in tackling climate change and the potential profits from such ventures including development of under developed areas is a welcome bonus.
It is in our best interest to be involved in tackling climate change and the potential profits from such ventures including development of under developed areas is a welcome bonus.
It is easy to challenge this proposal by stating that Cryptomining is not merely an energy question – and it is not. A lot of other infrastructural development has to be made in order for it to thrive. However Kenya prides itself as the technology hub of Africa and is more than capable of rising to the occasion. The clean energy question has also become very prime in the cryptocurrency world and that could be our competitive advantage.