Topic: Kenyan energy company entices Bitcoin miners with geothermal power (Read 386 times)

there actually is a difference.
for instance
kazahkstan industrial mining has about $0.04/KWH rate of electric(once you include everything needed)

US residential (home hobby mining) is about $0.12/kwh
EU/UK is about $0.24 average
places like japan/germany can be upto $0.39

so each different region has different costs.
its where the 'value' window' kicks in of 0.04-0.39 which converts to different mining costs.

whereby right now kazahkstan for instance is mining cheaply and able to sell at $30k for a profit. where as japan are not able to mine cheaply but see that buying bitcoin at $30k is 2.5x cheaper than wasting money mining. so they will just buy it cheap.

kenya offering to accept bitcoin miners would need to tempt them with cheap electric costs worthy of setting up in the area.

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its also worth noting the regions average electric prices to get a sentiment of value if you learn how to calculate mining costs because with energy prices rises, many asic farms on electric supply contracts of X month terms, might expire and have to pay new rates, which affect the value window.
also looking at the different rates in different regions helps you understand the 'support lines' and resistance lines of the markets by knowing where most people think its either cheaper to mine or buy when prices pass over these thresholds.

EG if bitcoin passes over a certain level americans flip from being cheap BTC buyers to cheap miners(to sell) so the sentiment flips over in favour of more sellers than buyers at certain support lines
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in regards to kenya. because they are moving out of the international trade of fossil fuel their energy costs might become less impacted by the world wide rise in energy prices (the more self sustainable they are the cheaper they can offer electric).

That is very nice news!

I always support greener ways of producing electricity. And if you couple that with Bitcoin you can get a nice PR package for two things we should all support.

It doesn't matter where in this world someone mines their Bitcoin. A huge plus that people never seem to mention.

Furthermore more miners will help boost Kenya's economy. Win win 

In the Corruption Perceptions Index 2021 Kenya is ranked 128th out of 180 countries for corruption, tied with seven other countries, including Bolivia, Azerbijan, Laos, and Paraguay - Source : https://en.wikipedia.org/wiki/Corruption_in_Kenya  (So they are doing very well or they are very good at hiding it) 

In any way, the price of the electricity that are provided...should make provision for some discount to the miners to run air-conditioning 24/7... because the temperatures are quite high for Bitcoin mining to be profitable. 

Of course not comparing day to day but giving an idea of how cold it can be there and just how suitable it does appear to me. The dust is a problem though, it always seems to be clogging up machines, filters, fans, but I did mention this as part of other factors that all need to be looked in combination if you wanted to mine.

I think the cold (low comparison) is pretty cool but the high comparison actually is more impressive... 30 degrees in Texas compared to 21 degrees in Kenya? Pretty cool.

Miners really need partnerships such as this one because they were being attacked by those who made propaganda that they are one of the main reasons for the current global warming which is not true. If they worked with this company and made every bitcoin miners use green energy, their critics would shut their mouths and look for other false information but when it comes to power consumption the people will likely believe what those critics have said. so they really need to consider trying this one in order to preserve the miner's future.

Thanks for the effort of illustrating your point. But that's the same line of argument. The same set of words translated into a picture. Again, electricity is a public utility. It is a basic service. Everyone deserves it however remote one's village or community is from urban centers. The government is tasked to ensure that the country's population have access to it and enjoy its benefits. The big difference between the government and private companies is that the former is service-oriented while the latter is profit-oriented. It could get involved in multi-billion projects without a direct ROI. That further means the former, unlike the latter, doesn't always measure things in monetary gains or even numbers. We have an island somewhere in the middle of the ocean hundreds of kilometers away from the mainland with only less than a couple hundred citizens in less than 50 families. Although its people cannot enjoy the kind of lifestyle large cities could offer, at the very least the National Power Corporation provides them electricity.

Apologies, OP, for the off-topic discussion.

geo thermal does not mean all of kenya has warm ground..

EG iceland is a cold climate. yet they have geo thermal energy

it means within a mountain (usually inactive volcano). a power company built a facility that drills deep into the mountain/ground and uses the heat from far far underground to then power the turbines..
it then has electric cable bringing the electric away from the immediate area where a couple miles away businesses connect to the grid, no where near the mountain/volcano/geothermal hotspot.

yep only a few hundred metres away can be where you wouldnt even know geothermal ground was there.
..
as for the businesses question
many businesses have to analyse the feasibility of running a business. EG retail requires customers, meaning they will only set up in a region where there is enough population to sell enough product to make profit. even companies given 100% tax breaks, and free electric or free building leases dont just turn up without atleast knowing if they are going to have customers to sell product to.. and also employable people to work in the business.

however bitcoin mining doesnt need to care about population numbers. or need to build any fancy glittery retail stores. they can literally turn up in shipping containers. plug in the electric and start mining, which is why this would be appealing for bitcoin miners

as the link said in the topic post.

kenya has a capacity of 10,000MW but only using 800MW, meaning they are only running at 8% capacity and not earning a potential 92% right now.
they would love to be running at a few thousand MW and get more income, which would then bring the average price per kwh down as the power plant costs can be diluted by the more power used.

If this happens it would be awesome I would love to see a green mining and my joy is greatest seeing a developing country like Kenya doing this, one of the biggest global problem about mining has definitely been the fact that it isn’t all that eco friendly and if this issue can be resolved I think many people who have more reason to adopt it especially those who firmly advocate for a more environmental approach.

kenGen seizes opportunities faster,welcome to kenya on a very good agenda.some countries are already bitcoin literate.and these miners are contributors and earners of foreign exchange earning productively from day to day.Very suitable,reference resource for an industry If in the majority of countries that are aware of the importance of the economy, it will certainly open up equal opportunities and be legally (known to the government) and open. Bitcoin is indeed not entirely legal in a country that has not acquired it. Of course, this is not always the case.
miners are the resilience of the network and bitcoin is the source of the unrestricted economy.good job kenGen

Whether this would be beneficial or not entirely depends on how the powering company and miners reside in the region. Just having geothermal energy does not mean it will benefit the miners. There goes so much planning setting up the miners around this plant. Considering it’s “geothermal” meaning the region has huge heated up climate which will hamper the mining conditions a lot. Like they might need extra electricity for cooling them down.

Also after reading few posts in the thread it seems the electricity won’t be that cheap as compared to traditional one. If they are in for extra energy production then wondering why other businesses are not blooming in that region?

Could it be Geo location ?

i do try to keep things in 'normal-speak' wording. by using analogies and examples.. and not use much techno buzzwords, where i can avoid it. but that creates 'walls of text' of length explanation.. which some hate. which i then try to re-explain differently or even use images. so i do try to cater to the general viewer.

as for africa.
the USE of bitcoin is hard due to the fee average being more than an a couple minimum wage hours in kenya
https://ycharts.com/indicators/bitcoin_average_transaction_fee - time of post over $1.50 (year average)
https://www.blockchain.com/charts/fees-usd-per-transaction - time of post over $1.50 (month average)
https://www.minimum-wage.org/international/kenya - $0.40/hour ($830 per year /52wk /40hour)

but if they have the right location near a cheap cost power producer thats green and has alot of excess capacity not being used.. then why not go for it.

however. again mentioning the minimum wage costs..
the cost of buying just 1 asic of say 140terrahash (~$12k) works out as being 30,000 labour hours to save up enough money to buy one.

where as an american/brit. at ~$10 an hour can afford one within 1200 labour hours (25x less time)
yep what would be for an american is 0.6(31 weeks) of yearly minimum wage. but is 14x(14 years) of kenyan minimum wage
so i doubt local kenyans will be mining bitcoin in kenya and this invitation is more so for US/Brits to move to kenya and mine cheap

its not a "just distance" thing..

if you take what you quoted of my message (single line out of context) then yes as a single line, it does not explain the specifics.. but funny thing is about public forums is that other people can read the whole message i posted where i explained more specific details. of why distance is a factor(with specifics aswell)

lets try going even further, heck maybe you dont like walls of text(funny to have that flaw on a text based forum) ..so lets use an image



hope that helps

Frankly, Franky1 you're very brilliant and intelligent. I must say the limitations of utilization Bitcoin in Africa topic was inspired by you!
Honestly, reading your profile gave me insight to write that topic.
A bit hard to assimilate at times, but, I must say you're good!  I hope you giggle and Chuckle at these, me don't flatter!!

I know. It must be the distance. Nobody needs to be schooled about it. My country, and probably a lot of other developing countries as well, actually shares the same problems with Kenya when it comes to challenges in electricity distribution, especially in remote villages and rural areas or what my country classifies as GIDA or Geographically Isolated and Disadvantaged Areas.

However, simply citing this distance challenge is more of an excuse. It is oversimplifying things. It has to be further qualified. And it is not and cannot be acceptable. When a government is confronted with a high number of its population having no access to electricity, challenges have to be broken down into factual and specific details. The president can't just be told by his/her energy secretary, "it's distance, Mr. President," and the discussion immediately stops.

Electricity, after all, is a basic utility, a basic public service. And it means more than just a light bulb inside the house or a light post on the street. It cannot even be reduced to a simple mathematics of investment versus return. In my archipelagic country, a small distant island with a relatively small population and without any industry, cannot just be deprived of electricity. And many of such islands are with electricity.

while UK/US are in a spring summer season.. right now kenya is entering its autumn winter season
so dont compare temperaures day to day. as its an unfair comparison to compare one places summer to another places winter

based on year average
kenya enjoys 17^oc(winter: july-august) to 21^oc(summer: feb-march)

where as say.. texas america is 13^oc to 30^oc

Yeah, have to be honest I didn't know much about the world outside until I actually learnt on my own. Geography lessons sort of only served to emphasise film stereotypes. I actually found many parts of Africa cooler and more comfortable to live in than where I come from. I've come to find that temperature is one problem, but also cover (shrubbery, etc.), wind, dust and humidity can sometimes be far more important for comfort and durability of machinery.

Also the issue of humidity mikeywith brought up, very true and that's something we deal with a lot in Southeast Asia, but air conditioning fixes the heat and humidity problem. Something else Kenya does a bit better too that most other parts of Africa (again, because of elevation).

30% do not have it due to distance.

here in the UK i like 20 miles from a power station. where by from the power station to my location there are 500,000 homes. meaning the cabling cost from my location to the power station is 500,000th of the price of the cable as we all pay a little bit in our bills to cover the costs of cabling, mainenance and upgrading.

however a tribal village of 30 people(10 homes) 120 miles from a power station automatically has a cost (if they managed to convince a company to cable it to them) of many times more than my costs.. which most power companies see no benefit/profit in investing in expensive cabling for such small communities especially when there are so many small communities. spread soo widely.
the costs to supply them all would never yield any ROI

and now you been schooled in why 30% are not supplied. and why those not close but within reach of a power plant are not cheap..

however if you are located right next to a power plant that also happens to have a city nearby to share the local supply cost.. then you can get it alot cheaper.
the more people sharing the cost. the more the over all cost comes down


the business idea is simple.
power plants never build to only have capacity to supply its local population of that year. they plan 60 years ahead meaning 3 generations of population growth. (3x+ current demand)

instead of waiting 20 years for an increase in demand(residential growth). meaning only working at 33% capacity in first 20 years. 66% in 20-40 then near 100% in 60+ years.. they want to be able to work at 65-95% capacity right now from day one. so that they can make more money right from day one.
this requires either convincing residents to sell their property far away and move closer, or entice businesses/industry with large energy requirements to come closer, on a more temporal contract(no 50-100year leases).

bitcoin mining is actually a good business to entice, as they can haul their asics in trucks and set up in weeks. and in a few years if the demand is too much, be told to stop and those asics can be moved out of the area very easily. (compared to other industries)

and so while waiting 20 years for residential demand that power plant can offer that capacity to bitcoin miners on 5-20 year contracts. and if residential demand does pick up, then cut off the mining contract to divert the capacity back to residential. easily and cheaply without affecting local economy

..
think of it like this.
1 asic farm requiring 3kwh per asic. with 10,000 asics in one building, employing 20 people

that 'supply contract' is the equivalent of 60,000 residents (20,000 homes)
that 'supply contract' is the equivalent of 20 product distribution warehouses (2000 employee's)

so if residential demand was to grow and the power plant had to cut the mining contract. legally speaking and local economically speaking..  it only affects 1 company and 20 employees. so its an easy decision

alot easier then trying to convince 20 warehouses/companies to move in with a risk of their lease expiring in 5-20 years. and then making 2000 local population unemployed

convincing 1 asic company or 20 product manufacturers. is an easy job to convince one asic company.
plus in 20 years, it wont affect the local economy much to make only 20 people unemployed compared to 2000+ people, where the latter would be bad for the area

I suppose good electricity and good access to electricity are two different bananas. And while the US has indeed quite a high electricity cost in average, Kenya has higher. And despite the high electricity cost, the US has a hundred percent access to it while Kenya has only 70%. Moreover, the impact of the electricity rate of a country will highly depend on the economic capacity of its population. In which case, Kenyans are definitely burdened a lot more than the US people.

Anyway, I'm not discrediting the profitability of the idea of the electricity producer. However, there must be a whole lot of other conditions which matter so much in the overall success or failure of this idea. The overall business environment of the country is going to be a big factor as well.

Companies do not care about corruption, even if the place is a corrupted one, then making a profit would not be that much of a difficulty and they could easily end up with something that bribery would fix and they would be able to profit from it. I mean think about it, you will be able to profit from paying bribery towards corrupted politicians and make a lot more money that you paid for, why wouldn't you want to do that?

I am sure that they would be willing to do that very easily. Hence all of the problems you may think about Kenya, is gone when we are talking about companies liberal/capitalist enough, because it might be bad, but they are willing to do bad things for profit.

Firstly seeing more countries coming up with the creation of green electricity energy and inviting cryptocurrency miners to come to their country is totally a good sign that there will be no problem for crypto miners in the future even though some people choose to accuse the crypto mining sector of harming the atmosphere whereas the CO2 released by miners is not up to the CO2 released every day by the industrial company.

This is a good one from an African country I hope others can learn from Kenya in other to boost the economy especially now that a lot of countries are struggling.