Saturday, January 28, 2023
  • Gridless is working with small Kenyan hydroelectric plants, generating below 100KW
  • Gridless is making it possible for power generators to channel the excess power generated toward Bitcoin mining operations in Kenya
  • Using renewable sources that scale well for Bitcoin mining means the growth of Bitcoin does not threaten the sustainability of the operation

Kenyan renewable energy company Gridless is channelling excess grid electricity towards Bitcoin mining operations. The move is hailed as a way to reward renewable energy generators in the country for excess energy fed into the grid while further decentralizing Bitcoin mining.

Gridless is working with small Kenyan hydroelectric plants, generating below 100KW. While these power plants are created to meet the electricity needs of communities, at construction, they are often surplus to requirements. As little as 10% of the power generated in these power plants is used.

Excess electricity in Kenya to mine Bitcoin

Gridless is making it possible for power generators to channel their excess power toward Bitcoin mining operations in Kenya. The innovation means that the electricity generators can earn good money on their excess power, which will help to make the financial case for installing the additional capacity, even if it is initially surplus to requirements.

Read: The environmental impact of cryptocurrency adoption and usage

Like many African countries, Kenya has many rural citizens without access to electricity.  Efforts to electrify these rural communities often face problems related to funding and investment. While it is possible to foresee the potential power demand for a settlement or area, the reality is that it is rarely reached instantly.

Houses are built slowly, and furnishing them takes even longer. So one may first construct their structure, then get it electrified. Later still, they get to acquire power-demanding appliances such as refrigerators and others.

This means that building power plants to their current capacity will render them inadequate as time goes on. On the flip side, building power plants with expected future capacity represent an investment that will take too long to pay back and, secondly, will not make the best investment case immediately.

This leaves many remote Kenyan areas in the grey area where investors are keen to finance electricity generation but cannot justify the investment outlay.

Gridless Bitcoin mining initiative comes in to reward power producers for electricity surplus to requirements and justifies the construction of these power plants to investors. For Kenyans, this furthers power generation and access to electricity.

Decentralizing Bitcoin Mining

Ask any Bitcoin enthusiast, and they will tell you that one of the best features of Bitcoin is its decentralization. In simple terms, no one party has any more power than other parties participating in Bitcoin.

While that is true for how cryptocurrency operates, this hasn’t been the case for the way cryptocurrency is mined. In the recent past, Bitcoin mining was heavily in China (73.3%, to be exact) before a crackdown slowed down the process. Other world powers were sceptical of this, leaving Bitcoin vulnerable to Chinese intervention if the country so desired.

Recent statistics from The University of Cambridge’s Judge Business School show that the tide has certainly turned. The USA now leads in Bitcoin mining, with 35.4%. Kazhakstan follows with 18.1%, and the Russian Federation mining at 11%.

While the mining activity spreads out, more than half of the world’s Bitcoin mining happens in 2 countries. Nearly 65% falls in just 3 countries. If China’s concerns about the mining activity were valid, then concerns should still be valid.

More importantly, the decentralization of Bitcoin mining further reveres the decentralization of the currency itself. Initiatives like that of Gridless are just as important to the entire Bitcoin ecosystem as they are to the Kenyan beneficiaries. The further the decentralised activities to do with Bitcoin, the stronger the degree of decentralization.

Read: Can Africa’s Bitcoin mining be boosted by solar power?

Only the beginning for Gridless and Bitcoin Mining

Gridless recently tweeted that they are looking to expand their work to larger renewable energy plants of around 500 KW capacity. If the financial model used with smaller electricity producers is scalable, that will mean a shot in the arm for efforts to electrify rural Kenyan communities.

Gridless Making Bitcoin Green

One concern that has been brought up over time is the energy consumption involved in Bitcoin mining. The real concern was, of course, the source of energy. Using non-renewable electricity sources questions both the scalability and sustainability of Bitcoin mining globally.

Using renewable sources that scale well for Bitcoin mining means the growth of Bitcoin does not threaten the sustainability of the operation. What Gridless is doing in Kenya is part of making Bitcoin greener.

While the desired startup type is a unicorn, we see that what Africa and the world needs are more Zebras. Zebras are businesses that have multiple bottom lines. Another way to put it is they are businesses that impact the communities in which they operate in more than one way.

Gridless and their combination of the electricity funding and generation problems in rural Kenya with Bitcoin mining is what a Zebra looks like. Plus, they are a lot easier to find than unicorns.

Read: Bitcoin Mining in Africa

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