ZoneBitcoin EditorialHundreds of millions of Africans face two problems that prevent them from progressing: 600 million of them do not have electricity, while almost all of the continent's 1,4 billion inhabitants lack electricity. quality currency. Compare that to the United States, Northern Europe, or Japan, where almost everyone has access to consistent, affordable energy and a widely accepted reserve currency like the dollar, euro, or yen.
The more Africans suffer from power cuts and high inflation, the more difficult it is for them to get ahead, despite their best efforts. Worse still, traditional energy providers and financiers have no incentive to reduce this problem, meaning currency depreciation, debt traps and power outages persist.
Most people might look at this situation and conclude that development in Africa will be very complicated even in the future. Despite enjoying abundant energy sources such as powerful rivers, constant sunshine, strong winds and geothermal heat, Africa remains largely unable to harness these natural resources for economic growth. A river can cross it, but human development in the region is painfully dependent on charity or foreign financial loans which prove very costly. Until now.
In the eyes of some of the continent's entrepreneurs, educators and activists, an invention has emerged that could potentially revolutionize access to reliable electricity and high-quality currency – the building blocks of progress – for Africa's rapidly growing population. Believe it or not, this invention is Bitcoin.
I. Mining in the shadow of Mt Mulangé
Just over an hour southeast of the city of Blantyre in southern Malawi, along scenic dirt roads, stands Mount Mulanje. A magnificent massif of 3 meters above sea level, one of the highest peaks in southern Africa, with its complex of cliffs and valleys, straddling the border with Mozambique. The breathtaking scenery rivals that of Yosemite, but given its remote location, there are many days of the year when local guides say there are no hikers. In any other country, Mulanje might be the site of a national park – complete with soaring granite cliffs – but for the most part the area remains quiet.
In the 18th and 19th centuries, the region was hit hard by European and Arab slavery. Portugal, Oman, Britain and other empires mined hundreds of thousands of slaves from Mozambique, Malawi and surrounding areas to be shipped for forced labor in America and the Middle East via regional ports like Zanzibar. At best, 1 in 5 people survived the journey. The slave routes passed through Mount Mulanje, which provided an easily identifiable landmark along the way. Today, the mountain foothills are dotted with lush forests, lush tea plantations, and farmers growing pineapples, bananas, and corn. The ecosystem is a global treasure, with endemic plants and animals including prehistoric cycads, Malawi's endangered national tree, the Mulanje cedar and some of the rarest insects and reptiles on the planet.
Unfortunately, the exploitation of yesteryear continues, but in different forms. Logging and mining threaten the local environment, and without industrial infrastructure, residents are isolated and left to fend for themselves.
The people here may be blessed 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 rural areas of the country – have access to electricity. In Bondo, a small village at the foot of Mount Mulanje, some residents first had access to lighting at night in 2016. “Before that,” according to the town's senior chief, “there was only darkness.”
This lack of electricity creates several problems for a growing population. Instead of lighting a stove, locals mine the area around the mountain, felling trees and brush to make a fire or create charcoal for cooking. At night, children study in the dangerous light of kerosene lamps and sometimes they do not study at all. Forest explotation devastates the forest and fires and lamps create harmful indoor air pollution. Foreign donors, including the Scottish Government, funded a small hydroelectric plant for Bondo in 2008 and, after eight long years of construction, it began to provide electricity for part of the local population.
During this period, Carl Bruessow – an avid hiker and director of the Mt. Mulanje Conservation Trust – helped establish the Mulanje Electricity Generation Agency (Mega), Malawi’s first private micro-hydroelectric power provider. Mega is also a social enterprise whose mission is to provide electricity to the citizens of Bondo. The gross cost of electricity generated by a small hydroelectric project like the one funded by the Scots on the banks of a river in Mulanje is extremely high, close to 90 cents per kilowatt hour. For context, residential electricity in the United States or Europe ranges from 10 cents to 20 cents per kilowatt hour.
Grid electricity in Africa typically ranges between 20 and 40 cents per kWh. For example, in Kenya it is 27 cents. Carl, in his efforts to give back to the local community, has largely subsidized this cost for Bondo residents. Thanks to his generosity, they paid less than 20 cents per kWh to Mega for electricity.
Carl covered the difference, but such a transaction was not viable. So far, more than 2 homes were connected to the mega-grid, but another 000 were still waiting to be connected to their homes, and Carl was running out of money. The power plants produced more than enough electricity to power 3 homes, but much of the electricity went unused and could not be sold because Mega did not have the capital to be able to purchase the equipment needed to connect new homes. There was also no capital to consider expansion so that hydroelectric power would not decline in late summer during the dry season.
In some places, industrial operations could purchase unused rural electricity. But in a place like Bondo, there just aren't many businesses that need electricity. Excess electricity could not be sold, so power plants built machines that existed only to create unused energy. This was particularly tragic when it rained heavily, or during periods of low demand such as at night, when power plants were forced to dissipate the overwhelming majority of their precious electricity: a complete waste.
Two years ago, entrepreneurs Erik Hersman, Janet Maingi and Philip Walton launched Gridless, a new company focused on off-grid Bitcoin mining in Africa. The trio had experience at companies like Ushahidi, BRCK and iHub, with expertise in building hardware, writing software, as well as scaling communications and internet infrastructure, which gives them an appropriate resume for this new activity. One of their first site visits was to Bondo, where they visited and inspected the Bondo power stations with Carl. In early 2023, a Bitcoin data center was installed and launched, and now Carl and Mega have a new source of capital. In December I was able to go to Bondo to understand how it all works.
Today, any excess energy generated by Bondo's power plants is sold in real time to the Bitcoin network by Gridless miners, and Carl receives 30% of this revenue. It arrives directly in Mega's wallet, in BTC directly. The new capital allows Mega to connect more customers to electricity, reduce costs and expand its operations, ultimately connecting everyone in the Bondo region to electricity. Mega, the community and Gridless all benefit. And what comes out here? No government assistance or subsidies are required.
Bitcoin is often portrayed by critics as an energy-wasting activity. But in Bondo, like so many other places around the world, it's becoming abundantly clear that if you're not mining Bitcoin, you're wasting energy. What was once a pitfall is now an opportunity. Bitcoin miners can be considered dung beetles ( Editor's note: these are beetles which feed almost exclusively on excrement and parturition residue.) taking wasted energy that no one else wants and transforming it into something valuable.
As Mega connects more and more customers, Gridless could unplug some of its mining machines and move elsewhere, or perhaps move to exploit the production of new power plants located in the same area and waiting to connect to their clients. If the Bitcoin network pays X, clients will have to pay X+1, so eventually miners will start paying more. But even in a situation where, at 17 p.m., Bondo's local demand absorbs almost the full available capacity, mining can still be lucrative because demand is so low and the river never stops flowing.
Elsewhere in Malawi, the national electricity grid is failing. Since December 2023, people who receive electricity from the grid have suffered 6 to 8 hours of “load shedding” per day, where large swaths of the country's population no longer have access to electricity. But in Bondo, there is no waste. The mini-grid is properly balanced by demand from Bitcoin miners. If there is not enough hydraulic power, Gridless's automated software turns off the ASICs. If there is too much hydropower from, say, one of the tropical cyclones that periodically strike the region, Gridless' ASIC operation absorbs it, conversely. It's no wonder that in little Bondo the electricity runs more consistently than in larger towns.
One night, during my visit to Bondo, Carl asked me to take a break as the sunset was fading, to look at the hills around us: all the lights were coming on, everywhere at the base of Mount Mulanje . It was a powerful sight to see, and amazing to think that Bitcoin was helping to convert wasted energy into human progress.
The scaling potential of this model is mind-boggling. Consider: Electricity production in Africa is typically planned over a 30-year period, for example. Sites are therefore built based on future capacity, not current capacity. So when a site like Bondo launches, it takes a while before it can go from 0% to 20% capacity. At this point, before Bitcoin, the power company might have had to charge 5 times the price of the electricity they were selling, just to sustain themselves financially.
This is catastrophic for customers, especially those like Bondo Village, who have the lowest disposable incomes on the continent. But with Bitcoin, the network now purchases 100% of all available excess electricity, reducing costs even if only a small percentage of the power plant's capacity is purchased by residential or industrial consumers.
We are told to believe that progress is always possible and that pure human innovation will make things better and cheaper. But in Malawi, given the collapse of the local currency, the kwacha, and the lack of incentives for infrastructure investment, the expansion of the electricity grid has not only been blocked, it has become prohibitively expensive.
Bitcoin solves this problem in two ways: by directly providing high-quality peer-to-peer currency to electricity producers, and by allowing them to use their full capacity, at all times, by lowering prices for their customers and by increasing their profits.
According to Erik, around 95% of all small-scale power generation in rural Africa is financed through concessional finance, while it may take five to seven years to raise funds from charities. The process depends on altruism and the subsidy is someone else “doing the right thing”.
The Bondo micro-hydropower plants, for example, were financed by foreign donors, who can be very helpful in getting a project off the ground but generally do not foot the bill for ongoing operating or expansion costs. They are also not subject to urgency and accept a delay of eight years to connect people to the network. With Bitcoin, the incentives are different. No more donors, make way for co-investors, who are very interested in getting the electricity up and running as quickly as possible.
Looking ahead, there is still a lot of work to be done in Bondo. Carl and Mega are currently determining how to leverage their new revenue stream from the Bitcoin network to connect hundreds of new homes to electricity. They are also considering the expansion of a new, larger power plant to solve the problem of lower energy production during the two driest months of the year.
It would of course be built in partnership with Gridless, so it could start generating revenue immediately, from day one, although it may take time to connect new homes and businesses.
The critical importance of electricity was highlighted when we met with Bondo community leaders and members of the residents’ electricity committee. They listed all the new benefits the city now enjoys: before, they had to walk 20 kilometers to get to things like corn mills, or televisions, or a refrigerator, or to charge their phones, or to get their children study in the evening, or to obtain health care. Now they no longer need to travel.
The women we met even pointed out a funny thing: before, the men of the village went to town to watch football in the evening, abandoning their families for a while. 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 risks and indoor air pollution. The percentage of children who access higher levels of education has increased considerably. The list of improvements in living conditions is long.
At this point you might be thinking, “Okay, that sounds good, but why not do something else with the electricity generated by Bondo’s rivers?” Philip explains that no other business would operate better in a location like this, with cheap energy but isolated from infrastructure.
The cost of AI agriculture, for example, is only to a small extent dictated by electricity: a chip can cost $30 and consume 000 watts. Compare that to Bitcoin mining, where electricity is a huge part of the cost, and a chip can cost $1 and use 200 watts. It therefore makes no economic sense to build an AI data center in Bondo, not to mention the connectivity, bandwidth and network latency issues.
Additionally, AI processes cannot be simply turned on and off like Bitcoin mining without causing damage to the service itself, so AI computing, in its current form, cannot be a network balancer. But Bitcoin can: When the microgrid needs to deploy electricity elsewhere, miners can easily shut down. Finally, even if Mega tried to serve AI companies in Bondo, how would they get paid? They would fall into the trap of exchange rate problems, management costs linked to the drop in value of the local currency. With Bitcoin, they are paid in satoshis which are accepted worldwide and sellable 24/24.
Another area to consider regarding the consequences of Bitcoin mining: heat. When we put our hands on the hot air coming out of the back of the Gridless facility in Bondo, we felt a searing heat. The more miners, the hotter it is. A miner is essentially a heater, and what's more, it's surprisingly efficient.
A new Reason documentary helps explain this, focusing on a public swimming pool in Brooklyn, where the owner now pays less each month in electricity bills to heat his spa water with ASICs than with more traditional heating equipment. Any heating operation that doesn't mine Bitcoin is likely wasting energy.
Miles north of Bondo, DR In Congo's spectacular Virunga National Park, rangers are mining Bitcoin with hydropower that has been stuck for three years, generating essential revenue for the bioreserve and the five million people who live there near.
Next March, the heat of Virunga miners will be used to dry cocoa beans. Traditionally, this is done by placing the grains in the sun, where they are vulnerable to bad weather and the risk of being eaten or stolen by animals. Drying the grains with the miners' hot breath will significantly speed up the process, at minimal additional cost.
Instead of spending $200 on an industrial drying operation, park rangers simply purchased $000 worth of ASICs that could process cocoa and earn Bitcoin at the same time. In the future, if one of their competitors processes cocoa and doesn't mine Bitcoin, they will waste energy and be less competitive.
According to environmentalist and Bitcoin supporter Troy Cross, during the last Bitcoin price cycle that declined in late 2021, mining was driven by access to cheap capital, not cheap energy . For example: Wall Street borrows cheaply to buy shares of Bitcoin mining companies.
But in the next cycle, he says, it will depend on access to cheap energy. And this could lean in favor of Africa. There might even be places, he says, where the cost of mining, for example in Blantyre, will exceed the miners' profits, but the savings from excess heat (selling chocolate) will make the profitable together. In reality, he says, you have to think in terms of: mining profit plus heat profit minus mining cost. Wherever there is low-quality electrical heat, there are unrealized Bitcoin profits.
In Bondo, Mega's original idea was to prepare dried pineapple food products using excessive heat. But during our visit, a new idea emerged: the mine itself is located on a tea plantation. The tea, once picked, must be dried within a few hours, and this is done using heaters that suck up the electricity. Why not use ASICs to dry tea? Operators are now thinking about it.
In a place where electricity is generally extremely scarce, it's a luxury to think about what you can do with extra energy. This is what is happening in Bondo now that there is technology that allows people to exploit new wealth that was once thrown out the window.
II. The collapse of the Kwacha currency
On a Wednesday morning in November 2023, Malawi's 20 million citizens woke up to find their currency devalued by 44%. The government and the 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 retailers simply closed their doors for the day as employees needed time to recreate price tags at gas stations and grocery stores.
As in Argentina, this is not a situation that most people could escape. In Argentina, there is a widely accessible and sophisticated dollar black market. In Malawi, this does not exist. People are stuck with kwacha currency. According to the country's Reserve Bank, 85% of Malawians are unbanked, meaning almost everyone uses government-issued kwacha notes as their primary store of value and medium of exchange. Devaluation here remains an effective means of stealing from the population.
If one were to design the perfect weapon, something that could harm everyone in a country at the same time, it would be difficult to imagine a better idea than currency devaluation. Unlike a nuclear explosion or a biological weapon, it can harm any person simultaneously. In this case, the damage was an immediate 44% reduction in the purchasing power and standard of living of millions of people in Malawi, particularly the poorest and middle classes who do not have easy access to the money.
It's not as if the government is holding a referendum asking citizens to vote on whether they want their purchasing power to collapse the following week: of course, no one would agree.
Everything is planned and orchestrated in secret, and it tends to happen overnight. Thus, despite Malawi's status as a partially free country, with relatively free and fair elections, the devaluation was completely undemocratic. This is part of a larger global problem where financial repression is ignored, even as political repression is discussed and highlighted.
Devaluations, for example, tend to be relegated to the back pages of newspapers, seen as an administrative matter. Yet they cause serious damage. It is surprising that devaluation is not considered a crime, or even a crime against humanity. The people of Malawi resisted in a series of protests. These small uprisings were suppressed, often brutally, by the police. And ultimately, the protesters were forced to give up and accept the government's decision. Nor was it the first time the public had been deprived of their jobs and wages on a large scale: over the past 20 years, the kwacha has lost 95% of its value against the dollar, largely during planned devaluations like this. .
As we passed through the markets and farms near Blantyre, it was clear that the hardworking people around us did not need such devaluation. They were already among the poorest in the world. Malawi's per capita income, according to the United Nations, hovers around $650 per year. That's 33 cents an hour, assuming a nine-to-five day work week. And this is of course the median rate. For people living in remote areas, it's probably much closer to $100 per year or 5 cents per hour. And now, each hour of effort only earns them 56% more grain, fruit, meat, air time, electricity, medicine, private education or gasoline than there at two months.
This particular devaluation, like so many others, was the result of foreign pressure from the IMF and World Bank, who want client countries to go through austerity before receiving new funds. Austerity is a euphemism for weakening the currency, ending subsidies on basic goods, reducing welfare, raising taxes, crushing unions, harming small local businesses, and creating more favorable conditions for large ones. multinational corporations and buyers of any locally harvested, mined or produced goods. .
After completing the devaluation at the end of 2023 and satisfying its creditors, Malawi received the green light for a $137 million loan from the World Bank, as well as a new loan of $175 million from the IMF. $115 million of these loans have already been repaid as of early December: a Christmas bailout for the country's corrupt bureaucrats. The IMF projects that Malawi will need $XNUMX billion in debt relief over the next three years, leading to a much greater devaluation of its currency on the horizon.
Rumor has it that another devaluation, perhaps another 25%, is coming. The macro impact on the country's economy has already been enormous: Airtel, one of the country's largest mobile operators, issued a statement at the end of 2023 that the company's profit is expected to be 100% lower than that recorded in 2022. “The unfavorable gap,” they write, “is due to the impact of foreign exchange loss… because the Malawi kwacha has lost 66% of its value against the US dollar since June 2023 until now. » Citizens may have stopped protesting in the streets against this disaster, but some are finding other, more discreet ways to lead a revolution.
Grant Gombwa is a student living in the Blantyre area and is one of the first Bitcoin meetup organizers in the country. He likes the idea of a currency that no government can devalue. Malawi's first official Bitcoin meetup will take place in February in the capital, Lilongwe. Grant will make the 5-hour drive to join forces with perhaps two dozen other Bitcoiners. It's a modest start, but given economic conditions, it's likely a trickle-down of 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 anything abroad with his home currency. But today he has received an upgrade and can speak the same monetary language as someone in New York, Cairo or Beijing.
Grant estimated that among Malawi's young people, aged 18 to 30, almost all owned a phone and about two-thirds owned a smartphone. Of course, not all smartphone users can afford consistent data, but that doesn't stop them from using Bitcoin.
As we learn more later in this story, Africans in countries like Malawi can use a service called Machankura to send or receive Bitcoins from any basic phone or any smartphone without data: Internet is not required. That means there is an economic exit path: it will just take time for Grant and other local educators to show people the way.
During our conversations, Grant explained a potentially promising idea. The Malawi government, he said, with incentives from foreign donors, is installing electric vehicle charging stations across the country. He believes that very few locals will actually be able to afford this type of car, especially in the first few years. So these solar power generators will mostly go unused, wasting the sun's energy.
Grant's idea is to bring a few ASICs to these presumably inactive charging points, plug them in, earn some satoshis, and pay a percentage to the property owner to ensure he doesn't get evicted. We'll see if Grant's idea catches on. But what is certain is that there will be many more such ideas, born from places like Blantyre and Bondo, now that wasted energy can be turned into capital.
III. Turning fire into digital gold
The Great Rift Valley is one of the largest areas of seismic and volcanic activity in the world. The geothermal energy potential in this part of Africa, which stretches 7 kilometers south from the Red Sea to Mozambique, is vast and almost entirely untapped.
To get an idea of the potential Bitcoin mining might have in the region, I visited a site located a few hours outside of Nairobi, Kenya, on the banks of the Lake Naivasha. The situation is representative of many industrial operations in rural Africa, or for that matter in rural areas around the world. A 1,4-megawatt geothermal plant (which channels hot steam rising from a 2-meter-deep hole through a turbine to produce electricity) powers a water pump about a kilometer away , on the banks of the lake.
The pump pushes water from the lake to a nearby complex of fields, where flowers are grown and exported to supermarkets in Europe. It's just one flower farm in a country full of them: Kenya is the world's largest exporter of flowers, and all those fields need irrigation, and all that irrigation needs electricity.
Here's the problem: these water pumps don't consume energy consistently. However, geothermal energy is still active, suggesting that a huge amount of electricity is wasted waiting for someone (or something) to come and buy it. Geothermal energy is probably the best existing energy source in the world for Bitcoin mining. Hydropower is great, but in dry months it can slow down. Nuclear might be better in absolute terms, but it is not practical at the moment for small sites, and it will be at least ten years before it is deployed across Africa.
Geothermal energy is 100% clean and 100% consistent. A power plant like that of Naivasha could operate for 40 years, without interruption and without change in electricity production. It is one of several systems that account for a total of 1 gigawatt (or one thousand megawatts) of electricity production 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 GW of geothermal electricity, but that the rest would be unexploited.
At the pump, we see something that might soon be present in any industrial operation in the African countryside: a small shack topped with a Starlink device emitting a loud humming sound. Inside are 144 Whatsminer ASICs, installed, carefully connected and managed by Gridless. Everything, from the cabin itself to the software, is custom made in Africa by Africans. It's a 500-kilowatt center, which Erik says is just about perfect for a situation like this. He shows me the electricity actually used by the ASICs on his cell phone: about 375 kW on average, every day.
This can be projected into the future. Gridless has completed a 5-year retrospective study of Bitcoin mining revenue and can predict that it will be paid between 7 and 9 cents per kilowatt hour by the Bitcoin network. If the price of BTC increases, profits will be reduced by new mining competition. If the price of BTC drops, it becomes easier to mine thanks to the difficulty adjustment.
The initial cost for a facility like Lake Naivasha is in the six figures, including ASICs and other infrastructure. Daily revenue from Bitcoin mining will amount to a few hundred dollars. Gridless pays 30% of revenue to the power company as a flat fee for the right to use the stranded electricity. Depending on the consistency of excess energy, Gridless typically recoups its investment within a few years.
It’s easy to see how Bitcoin mining is going to be extremely profitable across Africa. “If you’re building a variable demand power plant in the future, you should build in Bitcoin mining from the start,” Erik says. “Otherwise, you’re wasting energy.”
Storing energy in batteries and using it later seems like a good idea, but it doesn't make economic or technological sense at the moment, he says. Imagine a slightly larger 2 megawatt operation, similar to that of Lake Naivasha, which could generate $1 in gross revenue per year, not in kwacha or shillings, but in satoshis, payable directly on site, without accounting office or exchange fees required.
The lakeside scene is perfectly worthy of a solarpunk vision: the Earth's heat powers agriculture, and the Bitcoin mine eliminates all wasted electricity and converts it into digital gold. It's here, in a place like this, that you realize that Bitcoin mining isn't such a staggering waste of energy.
Later, as I chat with the Gridless team about the implications of the Lake Naivasha site at a Nairobi restaurant, the power goes out during our meal. Janet tells me that this is typical in Kenya but that Bitcoin can help solve this problem.
“During the day there is 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 are too many unplugging too quickly, it can cause power outages. But we can balance the network with more Bitcoin mining. We can absorb sudden incoming energy and we can slow sudden collapses of energy by switching off.
ASICs can be turned on and off at any time without harm, unlike manufacturing or other computer processes, making Bitcoin mining one of the world's best technologies for stabilizing networks.
What Gridless is doing on a small scale with off-grid energy could also help struggling national grids across the continent.
Micro-hydropower and geothermal aren't the only energy sources Gridless tracks. Solar power, they say, only provides power for a 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 much less attractive.
Gridless has its eye on a few wind sites, but another more attractive option appears to be biomass energy. In recent weeks, the company has brought two new Bitcoin mining sites online in East Africa, powered by biomass.
A new mine adorns a sugar processing facility and another completes a factory that refines sisal, a strong fiber used for carpets, ropes and other textiles. In both cases, leftover plant matter is burned and the heat boils water to power a turbine that produces electricity. In both cases, as is the case with most African industrial operations, the site is too far from any residential community to directly supply homes or other businesses. Often the electricity is simply sent directly back into the ground.
Biomass is generally considered a clean, renewable energy: sisal and sugar plants suck carbon dioxide from the air into their building blocks, then when burned, that carbon is released into the sky. Sisal and sugar production is widespread in East and South Africa, yet excess energy is usually wasted.
Phillip explains that even in the case where a power generation unit is added to a sisal or sugar refinery, operators generally cannot produce electricity unless around 70% of the capacity is used: otherwise the boiler breaks down. In the case of the sugar refinery, no one was close enough to buy the electricity. In the case of the sisal farm, the power generation function was simply never activated. Once again: enter Bitcoin. Thanks to Gridless's technology, these power plants are now operating at almost full capacity and saving 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 exactly what you will do. If you don't do this, you won't be competitive. You will waste energy.
IV. Bitcoin without internet
In 2023, some 600 million Africans did not have access to the Internet. More than half of the continent is still offline. Starlink makes what Gridless does possible, and innovative companies like BRCK continue to expand Internet access in rural areas. But what good is Bitcoin for the average citizen in a country like Malawi, where only a fraction of the population is online?
Ten years ago, Andreas Antonopolous, Bitcoin educator, wondered: what if Africa could overtake neo-banks, just as it had overtaken landlines? What if people simply used their phones to access financial services powered by Bitcoin? He even required : Would this be possible without Internet access?
As fate would have it, an entrepreneur named Kgothasso Ngako, born in Mamelodi, a village outside Pretoria originally built by South Africa's apartheid government, would find a solution.
“KG” as he is commonly known – was working as a computer scientist at the Council for Science and Industrial Research in Pretoria about 8 years ago when his boss gave him a new mission: to learn more about Bitcoin.
KG was once offered a payment of $1 in Bitcoin in 000 for remote work (2016 BTC at the time, worth over $1,3 today), but instead preferred payment via PayPal. For what? He didn't know how to use bitcoin at that time. The CSIR study he worked on reignited his interest, but researchers ultimately concluded that blockchain technology was more interesting than bitcoin itself.
In 2017, the price of Bitcoin skyrocketed and KG, like many others, finally took a closer look. But what initially caught his interest was the galaxy of crypto tokens that have sprouted up around Bitcoin. In early 2018, when the next bear market began to take hold, he traded an impressive number of tokens on Binance. He had a bunch of altcoins that had lost so much value that they couldn't even be traded on the site, so KG visited a "dusty page" to convert them to Binance's native BNB token and from there, he converted them to BTC.
He finally did enough reading and research and saw enough: he wanted to start saving and working in Bitcoin, not other digital currencies. Warren Buffet in particular had inspired him: what would increase in value over 30 years, KG thought? Bitcoin, he thought, and maybe not so much the other tokens.
The first Bitcoin project created by KG is Exonumia, named after an ancient word designating the study of coins and numismatics. In 2018, he wasn't ready to contribute code to Bitcoin, but at least, he thought, he could introduce the idea to more people. Exonumia is an Africa-wide translation platform, still operational today, that puts Bitcoin educational materials into dozens of African languages, from Berber to Malagasy to Shona. The key, according to KG, was the architecture of the translation itself.
Most people would try to automate translations using software. But that wasn't the whole point of the mission. Building a human network was the real goal. So KG proceeded “slowly” by recruiting people from various African countries and paying them to do the work. Over time, he got to know Bitcoiners in dozens of locations across the continent. In 2019, he expanded this network by hosting regular spaces on Twitter and inviting anyone in Africa interested in Bitcoin. People were sending him messages out of the blue on the Exonumia account, with new ideas, new countries, and new projects were born.
After his time at CSIR, KG took a job at AWS. But ultimately, the work there felt like it was taking him even further away from the things he found interesting. It was, as he puts it, completely disconnected from the realities of life in the South African townships where he grew up.
His Exomunia project seemed much more important. At the end of 2020, he decided to leave the corporate world and work full-time on Bitcoin. The first software project he launched was a VPN, called ContentConnect.Net. Confidentiality is extremely important to KG. Not so long ago, he says, South Africans lived under a dictatorial state of surveillance and control. He emphasized that Steve Biko (Editor's note: an activist in the anti-apartheid struggle) had published his famous essays "I write what I like" under a pseudonym: once the authorities discovered that he was the author, they brought him to justice and killed him.
Everyone can be a hero, KG says, but if they feel it's too risky, they won't take the most important steps. Creating a privacy-enhancing VPN accessible to Africans was therefore a laudable goal.
KG’s next project was a software solution to what he saw as one of the biggest obstacles to Bitcoin adoption in Africa: lack of internet access. A decade 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 used across the country. That’s when he started tinkering with USSD: a text messaging communication protocol, with no internet required. In May 10, a Namibian Bitcoiner wrote, “There has to be a way to get a Bitcoin wallet on a mobile phone other than a smartphone. Surely someone is smart enough to figure this out. I believe in you.” KG quickly responded, “Give me 2022 weeks.” He was ready. He had taken a pay cut (known as a “soul dividend”) when he left Amazon to work on his VPN, but he was more motivated than ever to work on Bitcoin.
Days after his famous tweet, with the experience of the MIT challenge a decade ago in mind, he launched Machankura, referring to the South African slang term for money. The new service allows feature phone users – or smartphone users without data – to send, receive and save Bitcoin. Some of the biggest challenges Machankura overcomes are in the UX area: traditionally, to use Bitcoin, people have to copy and paste an address or read a QR code. But basic phones in general do not have this feature.
The tool should also use Lightning, to overcome increasingly high on-chain transaction fees, but USSD has a 182 character limit, so long Lightning bills wouldn't be suitable. The solution was to adopt the Lightning address, a mechanism invented by Brazilian software engineers Andre Neves and Fiatjaf, which gives Machankura users an email-readable identity.
For example: [your phone number]@8333.mobi.
Today, Machankura users can send Bitcoin to each other using phone numbers or Lightning address “usernames.” They can also use chained addresses or Lightning invoices, assuming their phones have copy-and-paste functionality, but the first two options are the most used. To initiate the service, a user dials a number from their phone, generating a text response with various options, a sort of decision tree. To send, press 1, etc. From there, a user can do various things with Bitcoin without the Internet.
A powerful feature is the overlap with Azteco, a voucher service. So, for example, KG could go to a local in South Africa and buy a voucher called a “OneVoucher” for cash. In Kenya, someone could buy a similar voucher using MPESA. This is a 16-digit code with a certain value, and this code can be entered into the Machankura menu. Ultimately, KG and his team purchase an Azteco voucher with the 16-digit code and credit the Machankura user’s account. This allows Machankura users to easily “top up” their Bitcoin account using cash or MPESA credits.
Machankura also has an API for Bitrefill, so any product available on Bitrefill can be sold on the app's user interface. Availability varies by country, but when they access option 4 in the app, they can exchange goods and services: for example, airtime or grocery vouchers. This means that today, as we enter the year 2024, Machankura's user base of 12 Africans is able to send and receive value around the world, from buy mobile minutes, buy gas or gasoline vouchers, buy electricity (using prepaid vouchers) or exchange in cash, all using Bitcoin, without Internet. KG's dream is starting to come true.
Of course, big challenges remain. One of them spans the entire African continent. Currently, KG works with services like Africas Talking to access different telecom networks. In this model, Machankura pays Africas Talking a monthly fee for airtime, instead of users paying the telecom directly. Scaling is a slow but steady process, but it is happening even in places like Malawi. A second challenge is bitcoin custody. At the moment, Machankura is a custodial custody service. Meaning: they hold your Bitcoin. “Not your keys, not your coins.”
So, although it is a very useful tool, it does not grant ownership rights to its users. But, in the coming month, Machankura plans to release a proof of concept allowing users to self-guard. If it works correctly, it will be one of the biggest innovations in Bitcoin history, allowing people without the Internet to be their own bank.
The trick, according to KG, is that a SIM card is a computing platform capable of storing things. It can, for example, sign Bitcoin transactions, or interface with the Lightning Network. There is incentive to push Machankura in this direction for the mission of human freedom, but also for business reasons: they don't want to become as big as MPesa, be responsible for all user funds, and bear so much capital management risk client.
So, when KG approaches Vodaphone to propose a partnership to tens of millions of new users, it can say: how would you like to introduce Bitcoin to your users, without counterparty risk? That's a much simpler "yes" than if it said, let's introduce your users to Bitcoin, but you have to hold all the funds and deal with those regulations, laws, and liabilities.
In the West, Bitcoin adoption could mean the centralizing forces of large network mining operations and ETFs. But the irony is that in Africa, the technological arc of Bitcoin is making the currency increasingly decentralized. As the grid consumes more and more cheap electricity off-grid, at dozens of completely separate sites, it becomes increasingly difficult to stop it. And as the network adds more and more standalone users on potentially millions and millions of SIM cards, it becomes more and more unstoppable.
As described by Lyn Alden in her book Broken Money, until now, modern monetary technology has been inexorably centralizing as it has become more digital and advanced. Bitcoin is breaking this trend and Africa is helping Bitcoin break it.
And as Africa helps Bitcoin, Bitcoin helps Africans. KG says some Machankura users started with basic phones, then, after getting involved in the Bitcoin economy, bought themselves a smartphone. They go online using Bitcoin. And others, via Gridless, are getting into electricity using Bitcoin. Together, they are heading into the future.
V. Closing 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, is on a mission to integrate the women of Africa into a new monetary system that they (and not their husbands) can control and that can significantly improve their own freedom.
Her journey began in 2018, when she was doing a job in Nairobi and struggling with her personal finances. She ran Loryce, her corporate and social events consulting business. She would save her profits, she said, but at the end of the year she still had less profits. The government, she said, continued to raise taxes. And his only option was to save in a shilling bank account, which kept depreciating rapidly. As a reminder, although not as weak as the kwacha, the Kenyan shilling depreciated by 21% against the dollar in 2023, which itself also depreciated against goods and services. Ultimately, Kenyans are receiving at least 25% less for their salaries than they were a year ago.
Marcel heard about cryptocurrency and decentralized finance. “Can I be paid for this,” she wonders, “to save myself the hassle of fees and inflation?” » At that time, she said, there was ridiculous hype around blockchain in Kenya. There have been tons of scams and tons of events promoted around different tokens. In those days, there were no educational hubs or groups: you showed up to an event and hoped it wasn't a scam. “I have 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 in shillings and dollars. She decided to focus on Bitcoin, because she didn't have time to study more than one type of investment, plus, as she says, it's the mother of digital currencies.
In 2022, Marcel helped organize Kenya's first post-pandemic Bitcoin event in April at a Nairobi hotel, in a conference room full of Bitcoiners. Participants included local educators Rufas Kamau and Master Guantai, and even Paco of India, who was passing through on his journey to travel the world using Bitcoin alone.
At the event, Marcel noticed a problem: There were a lot of men but only two women, and she was one of them. She had noticed that crypto and blockchain events had a gender gap, maybe only 30% women. But 98-2% for Bitcoin events? “We could do better,” she said. So she reached out to a few friends, who told her they were afraid to go to Bitcoin events because the environment seemed male-dominated. Okay, fine, she thought, “There’s a problem, and I can figure out a solution.”
Marcel created Bitcoin DADA in 2022 as a safe space for girls and women to learn about financial freedom. The first cohort took place in May, with 20 people, just his circle of friends. Since then, she has been giving online classes every Tuesday and Thursday at 21:00 p.m. At first it was all Kenyan women. In the second cohort, they had 40 students. Each cohort lasts 6 weeks. Today, she says, they have held five cohorts and more than 300 women have taken the course, with a total of 130 graduates. Everyone now has a solid understanding of Bitcoin. They know how to protect themselves and buy Bitcoin without KYC via spot transactions.
Passing through Nairobi, I watch Marcel effortlessly use Bitnob and Machankura to buy Bitcoin with MPESA and then send Bitcoin without using any data. I think how people on Wall Street or Silicon Valley would be blown away by this feat, which she makes so simple. Marcel normally suggests a range of wallets in his course, including the Muun self-custody wallet and Phoenix, and the non-custodial portfolio of Wallet Of Satoshi for small transactions.
For local currency exchanges, Marcel generally recommends the Bitnob application, founded in Nigeria. Students, like everyone else in Kenya, have MPESA and use Bitnob to exchange it for Bitcoin and then withdraw to, say, a Muun wallet. Kenya is much more developed than Malawi, but many smartphone users still lack consistent data, making Machankura also a key tool. For the main program, Marcel uses the book Mi Primer Bitcoin (originally created in El Salvador), then she presents students with practical examples of why it is important for African women to become Bitcoiners.
In 2022, Marcel heard about the conference for the first time Africa Bitcoin Conference (ABC) in Ghana. Austrian educator Anita Posch approached Marcel and asked if she was going: no, Marcel replied, it was too expensive. But Anita insisted and helped organize a fundraiser, and contributed half while the community covered the rest. During her visit to Accra in December 2022, Marcel was inspired by what conference organizer and Togolese human rights activist Farida Nabourema had created.
In 2023, Marcel returned to the second edition of the conference with 4 women, and Bitcoin DADA helped two female-led teams participate in the event's hackathon. Marcel now offers a mentorship program that helps women speak out for themselves, whether on social media or at events like ABC, to help them tell their own stories.
In the field, Marcel visits universities and runs training courses for women and men together. Students are vulnerable as they are often targeted by scams. It describes the obscene efforts made by WorldCoin to try to attract students to buy and trade their token in Kenya. Bitcoin, she points out, does not have a similar marketing budget. According to her, education and training for young people is underfunded and is of vital importance. Every person who recently attended one of its university events has been targeted by WorldCoin: a brutal reality.
Marcel's goals are to streamline DADA's mentorship program so they can match talent and skills to Bitcoin companies, help hire women in the industry, and also expand to different countries. Several of his mentees have already obtained jobs or scholarships in the Bitcoin ecosystem, in organizations like Btrust or ABC. She says they now have 30 active alumni in Uganda, and more in Nigeria, South Africa and Tanzania.
“For me,” says Marcel, “Bitcoin gives us our voice back. It's hard to be African, and even harder to be an African woman. This gives us financial independence and an opportunity to work on ourselves.
Marcel has long supported a private school in Kibera in Nairobi, the largest urban slum in Africa. She has personally seen Bitcoin help people escape. She knows it can help get a lot more, but there's still work to do.
Her mission appears to be a daunting challenge: to grow from what is probably only a few thousand African Bitcoiners to tens of thousands, hundreds of thousands, millions and ultimately hundreds of millions. “If I don’t do that,” said Marcel, “I would have let my sisters down. It is believed that finance is a man's business, which is why women are victims of financial abuse. I don't want to give up on women. »
Bitcoin, she says, allows us to overcome macro problems like currency devaluation and micro problems like repression within the home. Much foreign aid, she says, doesn't reach the slums. Bitcoin helps because it ensures that money gets directly to where it needs to be: “We eliminate waste and corruption. »
On my last night in Nairobi, I meet Felix, a local Bitcoin entrepreneur. Like many others I've met, he now runs a Bitcoin business, in his case selling merchandise, and he gets paid in satoshis. He explains how the Lightning integration at Binance was a huge step for Kenyans as they can now instantly interface with Wallet of Satoshi, Phoenix, Machankura and other apps with very low fees.
He explains that Binance p2p is also widely used to exchange MPESA to Bitcoin. I ask him about Marcel and he raves about his work. He says it is essential to involve women in Bitcoin adoption and that Marcel is doing God's work in this area. “She is bridging the gap between men and women,” he said.
VI. African producers, not consumers
Bitcoin mining could help provide electricity to millions of Africans, but if the profits are not spent in the local economy and used by all citizens, then it is nothing more than a partial revolution.
If one of the challenges for popular adoption of Bitcoin in Africa is the lack of internet, and another is low usage among women, then another, according to Femi Longe, is breaking the cycle of dependence on Bitcoin. towards the West.
Femi is a Nigerian social entrepreneur with 20 years of experience mentoring African technologists and start-up founders, and played a key role in the creation and management of the two most important technology hubs in Nigeria and Kenya . In 2022, he was hired to lead the Qala Fellows, an initiative by Tim Akinbo, Carla Kirk-Cohen, Bernard Parah and Abubakar Nur Khalil to accelerate the process of attracting African computer engineers to contribute to the Bitcoin ecosystem.
Last year, Qala was bought by Btrust – the charity founded by Jack Dorsey et Jay-Z to support Bitcoin infrastructure in Africa and in the South – and renamed Btrust Builders, of which Femi now serves as director. It strives to help Africans move up the Bitcoin value chain. Rather than simply being consumers, as Africans are in many ways in the existing global financial system, he wants them to be producers in the new Bitcoin economy.
Femi says there are two steps to this journey: first, getting Africans more involved in discussions about protocols and infrastructure. As Jack Dorsey says, if Bitcoin wants to be money for the world, it must be made everywhere in the world. Femi believes that African perspectives will be needed to evolve Bitcoin to its true potential.
We can already see evidence of this in Machankura's product roadmap, which could help decentralize and strengthen Bitcoin by potentially creating millions more users, and in the work of Gridless, which is making mining more resistant and more censorship resistant. According to Femi, the second step of the journey is to create Bitcoin tools and applications that help Africans improve their quality of life, within the context of their own community, city and country.
Femi says this is just the beginning: in 2022, when Qala participated in the hackathon “Build for Africa » Around the first Africa Bitcoin conference, they struggled to attract participants. People were “taking it easy,” Femi said. But by 2023, he said the influx of talent was impressive. One of the winners was BitPension, a startup aiming to allow anyone in Africa to create a BTC-denominated pension, where anyone can buy satoshis in small amounts each day, which go into a time-limited personal custody. Today’s pensions, Femi said, could easily leave you impoverished, or end up in oil or weapons companies. BitPension, or a similar idea, could change that. The company won $5 worth of BTC and is currently building a minimum viable product (MVP). Femi also highlighted Splice, another hackathon participant, which is leveraging local mobile money broker communities to facilitate dollar-stable transactions on Lightning using Taproot Assets.
Femi claims that the Western mentality around Bitcoin is too focused on the savings aspect, and not enough on the medium of exchange part. This overemphasis on savings, he says, is slowing adoption and cementing 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-sharing apps, for example, and showing them how to add native Bitcoin payments. The only way out of a broken monetary system is to build a new one, he says, leaving the old one behind completely.
Consider the average person's day, Femi explains, and ask yourself: What are all the touchpoints where they will interact with money? Now: how can we place Bitcoin on one of them? How can we help them create options to spend the Bitcoin they earn? If they don't have these options, Femi says, they remain part of the fiat operating system. According to him, the more market services we have, the more goods we can buy and the less interest there will be in converting to US dollars. “If we don't get buy-in from merchants,” he said, “we'll stay stuck in the past.”
Another idea from Femi is that wallets in the future will be features and not commodities. “Where you keep your coins is important. The most important thing is what you can do with it,” he says. There will be, he says, retirement solutions, international trade settlement solutions, payroll solutions: currently many of these services are disconnected from wallets, and they will eventually be integrated.
Femi is also focused on helping Africans build strong narratives. He points out 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 for and who it is for,” he says. Many people who use Bitcoin in their daily lives beyond their savings don't know or aren't very good at explaining this to others. Or maybe they don't want to alert the authorities. He cites, for example, Nigerian importers who do not want the state to know that they pay in Bitcoin. The government, for its part, has asked any bank to freeze accounts linked to Bitcoin or cryptocurrency.
When people consider the Nigeria as one of the top 10 countries in Bitcoin adoption, they say: there are so many hodlers in Nigeria. No, says Femi: “many of these people don’t even have wallets. They just need to send funds to China tomorrow. They send naira to a guy who does the transfer. Bitcoin is starting to change the fabric of international commerce, but no one knows it. This is partly because people don't want others to know the details, but again, it's because there is no investment in a platform to help people tell their stories.
The Bitcoin ecosystem, he says, doesn’t do the work needed to counter what the IMF might say. There is very little empirical data on adoption, which Femi says could actually help policymakers. One of his contacts in the Nigerian government told him, “I need something to convince me that this makes sense, that it’s not just about handing over power from one group of white people to another.” Nor, Femi says, is there enough work being done to help people avoid scams and tokenism. That hurts the individual and any government looking to innovate. Look at the Central African Republic, he says. “They tried to follow El Salvador, but a bunch of crooks pushed them to focus on the sangocoin.
“To move forward, I think we need to write books,” says Femi. “It’s scary for a lot of us because we’ve never done it before. We don't know what the process is. He says that 16 or 17 years ago he wanted to read a non-fiction book about Africa written by an African – and it was very difficult to find a publisher. Unchained Africa by Ghanaian economist George Ayittey was one of the first he saw, but there weren't many others like it. According to Femi, this problem is now spilling over into the Bitcoin space. What fellow Btrust leader Abubakar Nur Khalil is doing with his Forbes columns is great, he says, “but we need books and mentoring on how to do it.”
Femi thinks a lot could go wrong. He is wary of the power of Bitcoin billionaires as the currency continues to grow on a massive scale. “As an African,” he says, “we saw that Bill Gates may have had good intentions, but his foundation currently has considerable influence on health policy on the continent. Zuck may be great – but then again, his company has a huge influence here. So there is a part of me that is afraid that even if the system decentralizes, in a hyperbitcoinized world, there will always be people with disproportionate power. The real promise of Bitcoin is that everyone has a fair chance. The world we live in is broken: the gap between the richest and the poorest, in every country, has never been wider. Reproducing these same imbalances in the Bitcoin world would be a failure.
Despite this concern, Femi says Africans “cannot afford to stay away”. Bitcoin, he says, is inevitable and already exists around us. He believes this could change the existing global monetary system. “What happens in Africa,” he said, “affects the way black people are treated all over the world. Bitcoin is an opportunity to redefine the system and power structure.
He hopes that when Bitcoin reaches its full potential, Africa's place in the world will be different. Independent and not dependent. “I hate coming from a continent where everyone just wants to help,” he says.
But the only way Africa will truly benefit from the Bitcoin revolution, he says, is for Africans to lead the way. “The hope I have,” he said, “is not infeasible. We must achieve this.
VII. A flaw in the matrix
In Kenya, I had the chance to hear Philip tell the origin story of Gridless: 10 years ago, he and Erik were discussing the Turkana Wind Farm, a massive 400 megawatt project built in Kenya and who hadn't had any customers for years. The government had to pay 9 to 10 cents per kWh for nothing. Indeed, the architects would not build the site without guaranteed income from a government or major client. The situation is common: a “take or pay” contract. The worst: Kenya has plenty of cheap geothermal power, but it's often kept offline because the government already has to pay for expensive wind power.
Erik and Philip watched this unfold and thought: what a disaster. They also asked themselves: how could we solve this problem? What's a power user who doesn't need a lot of connectivity? Is it location independent? Initially, they considered setting up an aluminum processing plant in Turkana, but the logistical challenges were overwhelming. They then thought of a data center. Better, but the Internet wouldn't be enough, they thought.
Finally, the Eureka moment: Bitcoin could solve this problem. They laugh at how they could have succeeded if they had taken that risk ten years ago. Of course, it was early days back then, and mining in Turkana was too crazy an idea for them to give up their current jobs for. It wasn't until 2022 that they finally put everything in place to make Gridless a reality.
For many Africans, Bitcoin represents a double revolution: allowing communities to use stranded energy and, at the same time, giving them access to a parallel global economy, based on property rights, without borrowing abroad under strict conditions.
In the modern financial system, countries like Kenya, Malawi and the DRC must obtain dollars or euros to buy planes, industrial equipment, fertilizers, oil or even to repay their debts. A foreign producer will not accept kwacha as payment. And printing kwacha to buy dollars is not an option: it causes the local currency to fall. Policymakers must therefore focus on producing products that meet the expectations of the United States, Europe or China, rather than meeting the needs of the country. Only then can they earn the money necessary to be able to progress as a nation.
It doesn't always have to be this way. If Bitcoin becomes an increasingly important part of the global economy, African countries will be able to turn their energy into a global reserve currency, without asking permission or doing business with a distant empire or power.
The relative quantity of Bitcoin may not be huge, all things considered, but economics is all about margins, where it could make a big difference.
Today, Africa has 45 currencies. Intercontinental trade is plagued by delays, bureaucracy and rent-seeking, particularly from abroad. By the end of 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 tribute to former colonial powers. There would be no global rent-seeking to the extent that an inhabitant of the DRC exchanges with a Kenyan: it could be a true peer-to-peer transaction.
It is of course difficult to say whether things will happen this way. But all revolutions start small and grow. Today, individuals in East Africa can already easily connect with their peers elsewhere on the continent, within minutes or seconds, in a way that does not unduly benefit the West.
Fundamental technologies like the plow, metallurgy, the steam engine, the airplane, and the Internet have advanced civilization beyond the wildest dreams of our ancestors. People today undoubtedly live longer and healthier lives than they did 1 or 000 years ago. This is not to say that it has always been positive: advancement in one area has often come at the expense of regression in another area.
Colonialism, tyranny, slavery, the enslavement of women and war remain scourges on the planet.
One wonders what could result from a monetary revolution comparable to the greatest inventions in human history.
Morally speaking, it is difficult to defend the current system, in which around a billion people benefit from a globally accepted and freely tradable reserve currency, and where seven billion earn wages in strictly inferior monetary supports.
The dominant currency is sometimes saved by tactics such as aggressive interest rate hikes that crush more than 150 other, weaker currencies, reducing the wages of billions of people. Both politics and markets have played a role in creating this monetary caste system, and left alone, it appears that it could become increasingly brutal, with peripheral currencies becoming weaker and weaker. with dominant currencies becoming more and more prevalent.
Ironically, when the West suffers a financial collapse, people turn to the dollar.
Where you're born shouldn't determine the quality of your salary, and yet it does. Until now. Bitcoin is, without exaggeration, something of a problem that fixes the system. Something that the current system did not expect and cannot handle.
If it continues to grow and expand, it will eventually eliminate the “currency devaluation” option that the governments of Malawi and so many other countries use to keep their corrupt operations afloat. They will have to resort to other options: higher taxes or reduced public spending, but they will no longer be able to carry out massive theft at the press of a button.
Three years ago, initially inspired 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 many new stories online renewable energies in Africa. But I had no idea on what scale, until I started visiting some of the Gridless sites, and I had time to really think about the implications, which are truly staggering.
For example, instead of a government trying to build electricity infrastructure by borrowing recklessly, selling shares to foreigners, cutting budget spending, or raising taxes, why not just design a strategy around Bitcoin mining? Kenya could send a team of researchers to map all the sites like Lake Naivasha, determine the total electricity wastage at existing power generation sites, determine how many ASICs they could integrate, trace the revenue, then contract a final fiduciary loan from the IMF or an international creditor.
Over the years, fiat payments to the IMF would be eclipsed by capital appreciation from Bitcoin mining operations. Eventually, they could become debt free.
We also can't help but wonder about the fleets of older ASICs, which are no longer very profitable with high Western electricity rates, but perfectly functional with the cheap or free energy unlocked in Africa and the countries of the South. They could be, and probably will be, a boon for off-grid miners in countries like Malawi. Another thing: weather events, trade wars and financial crises could make energy very expensive in the West, while mining companies could have to close their doors in America or Europe. But off-grid in Africa, this drama doesn't matter and may even mean more Bitcoin for local miners.
It's not just about what Bitcoin can do for Africa: it's what Africa can do for Bitcoin. If corporations and, one day soon, nation states and corporations start converting the continent's thousands of gigawatts of wasted and untapped hydroelectric, geothermal and biomass energy into renewable energy.
By providing all this electricity to the Bitcoin network, through a decentralized and disconnected network system, we then have a much more unstoppable global currency.
The type of off-grid mining that makes economic sense to expand across Africa can decentralize Bitcoin and make it stronger. Likewise, if today's hundreds of millions of mobile money users never get a bank account, but simply switch from MPESA to Bitcoin using their SIM cards through a service like Machankura, the network becomes much more resilient.
I asked Erik and Philip how long it would take for Bitcoin to start truly transforming the continent. Erik said that within 30 years, mining will help increase access to electricity in Malawi from 15% to almost 100%. Philip said Africa could, with the help of Bitcoin, reach the per capita electricity consumption of Northern Europe by the end of the century. But both agreed that the adoption of Bitcoin as a medium of exchange could happen much faster.
For hundreds of millions of people, it may ultimately not be the United Nations, nor Bill and Melinda Gates, nor the World Bank that will bring them into the 21st century, but a network of open source software, 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 when so many people are jaded about the world around them, it's refreshing.
"The big problem that prevents us from living every day," Erik explains, "is the number of people who lack electricity on this continent. It is impossible to move forward without it."
“Imagine 1 people without electricity,” he said. “Now 000. Now 10 million. Now 000 million. You can not. It's so huge and dramatic. And without power, there is no freedom. But now we can solve this problem and make money at the same time.
- Article written by Alex Gladstein, director at the Human Right Foundation.
- Read the original article here on the BitcoinMagazine website.
