(Ami Vitale/Getty Images)
Bondo is a scattered cluster of villages in a remote region of Malawi near the border with Mozambique. It sits in the foothills of Mount Mulanje, where residents rely on their feet for transport and a few crops to feed their families. Yet unlike in most places in this impoverished country, when night descends they can now switch on lights, stoves and televisions in their homes.
For electricity has arrived in Bondo. Three turbines were installed in a micro-hydro scheme exploiting the fertile region’s rainfall. And the impact has been life-changing for the 1,800 homes so far connected to a mini-grid. Children can study after dark, so now have a better chance of passing the exams for secondary school rather than having to leave aged 11. Drugs and food can be stored in fridges, so villagers do not have to make the 12-mile trek to the hospital and can produce batches of food or drinks to sell at market. Cooking the evening meal is three times quicker — and far less destructive to the environment — without the need to collect firewood.
One group of women giggled when I asked if they had televisions and watched football in their homes. “Before, our husbands would say they were going off to watch football when they were really walking out with other women. Now they can no long claim they are going off for football,” Bertha told me. The senior chief told me they had never dreamed of having energy supplied to the villages, with a dozen maize mills, many small enterprises, schools, shops and churches also connected to the grid. “When you move around Bondo you see happy people — and that’s because of electricity.”
Yet the big surprise in Bondo is not simply the supply of energy to such an isolated community, in a country where only one in eight citizens has access to grid electricity and on a continent where almost half the 1.2 billion population still lack this life-changing supply. The real eye-opener is the stack of 32 computers inside the concrete pump shed. This innovative mini-grid — located more than two hours from Malawi’s second city of Blantyre along bumpy roads and tracks that can become impassable in a torrential downpour — is mining Bitcoin to fund its operation.
It is a smart idea. The computers used to create valuable new Bitcoin tokens and validate transactions consume around the same amount of energy as a medium-sized country such as Sweden would generate. Hence the stinging critique of how this cryptocurrency wastes the planet’s precious resources. This initiative flips that narrative by using Bitcoin mining to fund energy in parts of Africa that are too poor or remote to merit connection to grids, but which do have plentiful supplies of potential power sources. Mining soaks up the excess energy of these renewable plants. And this delivers not just electricity but a powerful jolt to to drive development in the local economy.
The concept comes from a Kenyan firm, Gridless, set up in 2022, whose backers include Twitter founder Jack Dorsey. There are four other sites in Kenya and Zambia and plans for scores more across the continent. Its aim is to demonstrate how Africa could play a central role in countering the conventional belief that Bitcoin, now 15 years old, is used simply for risky speculation and dodgy transactions. Instead, it backs those who claim it will lead to more inclusive financial systems as it usurps the control of dysfunctional governments and manipulative central banks.
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SubscribeVery enjoyable read.
The only criticism I have is how the author repeatedly conflates Bitcoin with crypto, even mentioning the fraudster SBF. If you do the work to understand monetary philosophy you’ll quickly realise that Bitcoin is the polar opposite of crypto. Bitcoin is about fixing the base layer of human cooperation. Very few people understand this but more do every day.
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In no way is this a ‘good idea’. It’s a ridiculous waste of resources that could otherwise be utilised for the good of those communities. If any wealth is actually created from it then no doubt it will go to one powerful person or group. Whole thing should be smashed to bits.
Ya. Let’s deny some of the most impoverished people in the world electricity for the first time in their lives because us fat, wealthy white people don’t approve of the way it is financed and the energy used to create that revenue.
Financing it through Bitcoin is an illusion. The author speaks of dysfunctional governments and manipulative central banks, yet here we have an unregulated industry controlled by a few powerful criminals in a country where corruption is a way of life. What can go wrong?
“an unregulated industry controlled by a few powerful criminals” The whole point of Bitcoin is that it’s not controlled by anyone (that’s incidentally why governments hate it and try, unsuccessfully, to ban it).
Maybe you think we should give them another £4.5billion, which actually did end up in the hands of powerful criminals.
Except the “illusion” is what’s happening. How terribly convenient to have the luxury of taking basics for granted and then quibbling over how people who have never before had them should fare.
Waste of resources? You do understand that the energy harnessed was otherwise going to be ignored? Why is it ok that the people of Africa are held under repression from the West? It’s easy to poo poo a subject when you don’t understand it, I get that. I strongly recommend you dedicate time to understanding these topics in detail.
It would be extremely naive to believe the Bitcoin operation will be run on otherwise wasted energy. What we have here is typical of impoverished African countries, who routinely grow cash crops for export instead of food crops for local consumption and this operation will go the same way.
So instead of using the excess electricity to drive more economic growth which could be used to maintain their microgrid, they are instead using that to speculate on Bitcoin? What happens if the price of Bitcoin crashes (again), will they no longer be able to maintain their electricity system?
Exactly – the microgrid was funded by international aid and will now be controlled by criminal entities cashing in on that investment. They will have no interest in supplying local electricity when there is a clash between feeding the power hungry computers and local demand.
The entire world is run by criminal entities calling themselves international aid.
Well, RobbieK, let’s just sit back and watch that river flow.
Instead of a mad scramble to get yourself onto the right side of history with an ostentatious moral stance you could just admit that it’s not your problem and there’s nothing you can do beyond airing your convictions on social media.
Of course, the usual suspects hate Bitcoin. They see its existence as indictments of them and their vision of controlling as much human activity as possible. Also, Paul Krugman is the same decent economist turned third rate columnist (and former Enron advisor) who assured readers in 1998 that the Internet’s growth would stall.
Krugman also wrote in 2016 that the stock market will crash if Trump gets elected
I have no problem with owners of surplus electricity mining bitcoins and sellng them while they can but any mention of a bitcoin should also spell out that it has no intrinsic value. It moves wealth from new investors to old investors. At least $100 billion has been transferred by old investors into “real” investments, mostly US treasury bills. It is not available to repay the investors who bought the bitcoins from them. They have to get their money from new investors who think there will be yet more new investors to repay them. One day new investors will instead be attracted to a new fad and the then holders of bitcoins will own an entitlement in a blockchain that no one wants. At that point there will be no income to enable anyone to pay to keep the computers holding the blockchain running. Bitcoins will cease to exist. The only question is when?
9 comments here. Why can I only see 3?
Bitcoin advocates have always been hoping – dreaming – of some sort of use case which makes the cryptocurrency inherently valuable. a first suggestion was use of stranded energy assets and now perhaps we see a second one, which is leveling up financially across the world. Neither were in the thoughts of the early developers, but that’s how tech proceeds!
Mining bitcoin’s great so long as you have your own hydro-electric plant. With each passing day, it requires more computational power and therefore more energy to mine. In turn this requires higher valuations to justify the mining costs. Meanwhile transaction costs soar and it becomes increasingly less viable as a currency. When was the last time you used bitcoin to purchase anything?