Cryptocurrencies, Mining, Africa, Hashrate

Ethiopia became the first country on the African continent to introduce large-scale, government-backed Bitcoin mining. In 2024, it achieved 2.5% of the global Bitcoin hashrate, which put Ethiopia among the leading locations for Bitcoin mining. This came about in large part due to the country's abundant supply of hydroelectric power.

Joining Cointelegraph in a recent AMA session on X Spaces, Philip, who oversees strategy and partnerships at UMINERS, explained, "Ethiopia used to have a lot of problems with the power grid. But in recent years, they built the Grand Ethiopian Renaissance Dam on the Blue Nile River near Addis Ababa. This investment has really paid off, as they now have a massive surplus of hydroelectric power."

These conditions have made the country ideal for energy-intensive mining operations. In 2024, the Ethiopian government signed agreements with 21 mining companies, including UMINERS. The move can be interpreted as part of a broader shift toward economic openness and foreign investment, as well as a possible expansion of crypto regulations, even though crypto trading is still illegal in Ethiopia.

"I think it's going to take some time for Ethiopia to become more crypto-friendly in terms of payments," Philip noted. "The reason for this is the limited supply of US dollars. Their strategy is to bring in miners and data centers, which have high electricity costs, to set prices in USD. In this way, the government builds up a USD surplus that can then be used in international trade.

He also shared the company's plans to expand its local presence, particularly through hiring and training. "We will be hiring a large number of people in the region. And to meet the demand for skilled workers, we want to work with local universities to create courses and support job growth and future pathways for people," Philip said.

Reflecting on the evolution of Bitcoin mining, he noted that the industry has come a long way since its early days. "Back when it first started, anyone could set up a computer and start mining. Over time, you needed more and more powerful equipment. Now, on average, a miner costs between $3,000 and $10,000. So it's not really for the average person anymore."

To maintain accessibility, UMINERS has launched a zero-interest, Bitcoin-collateralized loan program, especially for smaller businesses entering the space.

"The way it works is pretty simple. Clients go through an approval process, and once approved, they can deposit Bitcoin into a Ledger Enterprise account. That Bitcoin is held as collateral to fund the purchase of mining machines. The machines are housed in UMINERS data centers as additional collateral, while clients repay the loan in monthly installments of 10%. For each installment paid, clients receive 10% of their Bitcoin back. This system allows our clients to keep their Bitcoin and benefit from its future value, rather than having to sell it upfront," Philip explained.

In addition, UMINERS expects to launch cloud mining options in the near future, with two tiers: one for institutional clients and another tailored for individual users.

"I think we'll eventually become more government-focused, where big governments and big corporations will do the mining," Philip concluded. "We make mining easier for them by taking care of the whole turnkey solution - mining rigs, hosting, logistics."

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