Ethiopia Partners with Hong Kong Firm for $250M Data Mining Project, Opens Door for Bitcoin Mining
Summary:
The Ethiopian government has partnered with Data Center Service, a subsidiary of Hong Kong-based West Data Group, to embark on a $250 million project aimed at establishing advanced data mining and AI training systems in Ethiopia. Despite no explicit mention of crypto mining in Ethiopian Investment Holdings' announcement, it signals the possibility of Bitcoin mining being part of the collaboration, a move stated by Kal Kassa, Ethiopian CEO of Hashlabs Mining. The venture, however, raises concerns as Bitcoin mining is a contentious issue in Ethiopia, primarily due to most of the population's lack of electricity, despite the country having one of the world's lowest electricity rates.
The government of Ethiopia has entered into an alliance with a data center company based out of Hong Kong, with Bitcoin mining being one of the collaborative projects. Ethiopian Investment Holdings, a state-owned firm, has ratified a Memorandum of Understanding with Data Center Service, a branch of Hong Kong's West Data Group, as per a recent statement released on February 5th. The Ethiopian government, along with West Data, will work jointly on a project worth $250 million, the objective of which is to set up top-line data mining infrastructure and artificial intelligence training systems within Ethiopia.
Kal Kassa, the Ethiopian CEO of Hashlabs Mining, declared in an online post that the Ethiopian Government will be involved in Bitcoin mining through its collaboration with Data Center Service. Hashlabs Mining, based in Indonesia, already operates in Ethiopia, a country that legalized mining in 2022 but where cryptocurrency trade is still forbidden.
Despite no explicit mention of crypto mining in the Ethiopian Investment Holdings' announcement, a February 7th Bloomberg report suggested that the Ethiopian Government has set up a testing ground for the potential issuance of licenses for "cryptographic products".
Bitcoin mining in Ethiopia, however, is a contentious subject. The new Grand Ethiopian Renaissance Dam, built across the tributary of the Blue Nile River, has given Ethiopia one of the world's cheapest electricity rates, despite being only partially operational. The key issue lies in the fact that nearly half of the Ethiopian population doesn’t have electricity in their homes.
A separate report suggests that there are currently 21 cryptocurrency miners in Ethiopia, of whom 19 are Chinese nationals. Despite bans on cryptocurrency mining and trading in China, these activities are still ongoing. In Ethiopia, bitcoin miners have the backing of groups like Project Mano and BitcoinBirr. Further, Ethiopia is working with Input Output Hong Kong (IOHK) of the Cardano blockchain to revolutionize its education sector.
West Data Group is a fintech driven by blockchain, which established its inaugural data center in Kentucky in 2017. It has also set up centers in Texas, Kazakhstan, Angola, and Kenya. The company's website asserts that from 2021, it changed its strategic focus towards Bitcoin mining, as well as digital currency investment and trade.
Published At
2/16/2024 12:38:22 AM
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