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How Ethiopia’s Low Energy Costs Allow BIT Mining to Recycle its Bitcoin Machines

Published

2 месяца ago

7 января, 2025

Landlocked between six different neighbors in the Horn of Africa, Ethiopia has approximately 120 million inhabitants, making it the second most populous nation on the continent, and a GDP of $163 billion, which puts it in the same economic league as Ukraine, Morocco, Slovakia or Kuwait.

However, the country has also suffered from a bloody civil war, with several regions still under the control of anti-government forces, like the ethno-nationalist Amhara militia Fano.

But that hasn’t prevented Chinese bitcoin (BTC) mining company BIT Mining (BTCM) from expanding its operations — until now confined to Akron, Ohio — into Ethiopia by signing a $14 million deal to acquire facilities worth 51 megawatts (MW) and almost 18,000 bitcoin mining rigs in the country.

In fact, for Dr. Youwei Yang, chief economist at BIT Mining, Ethiopia’s ultra-low electricity costs provide the firm with a unique opportunity to extend the shelf life of its bitcoin mining rigs which, due to the industry’s extreme competitiveness, tend to become obsolete in the U.S. after roughly two or two-and-a-half years of activity, he said.

“The price of electricity is maybe 70% higher in Ohio than in Ethiopia, sometimes almost double, so it can only run very advanced ASICs, like the newest or second newest generations,” Yang told CoinDesk in an interview. “Now we can just move older generation machines into Ethiopia.”

It’s a big deal, because aside from mining litecoin (LTC) and dogecoin (DOGE), BIT Mining is mainly in the hosting business, meaning that it operates mining facilities for the sake of various clients. State-of-the-art mining rigs don’t come cheap (a single machine fetching anywhere between $5,000 and $10,000 for retail buyers) and investors are naturally reluctant to send such expensive pieces of machinery to war-torn jurisdictions.

The pitch, then, is to install the newer rigs in the U.S. and send out the aging ones to Ethiopia. That creates a positive feedback loop, because now investors can extract greater returns from their machines than if BIT Mining restricted itself to operating in the U.S. That, in turn, attracts more capital, Yang said.

“We can get at least two extra years by moving the rigs to Ethiopia, and then maybe after that, they’re completely done,” Yang said.

Mining bitcoin in Ethiopia

But why Ethiopia specifically? For one thing, the country’s electric standard is similar to China’s, which allows BIT Mining to leverage the expertise of its engineering team and redeploy some of the electric equipment it previously used in the Middle Kingdom before the bitcoin mining ban.

Ethiopia also enjoys an abundance of hydroelectric power, some of it thanks to Chinese investments, which have totalled $8.5 billion across more than 3,000 projects in recent years. For example, China helped fund the construction of the Grand Ethiopian Renaissance Dam (GERD); once completed, it will be the largest dam in Africa and generate over 5,000 MW.

Not all of Ethiopia’s electric output has been put to use yet, however, and that has created a window of opportunity for bitcoin miners, especially since the Ethiopian government has been supportive of the mining industry. In fact, the country is home to 1.5% of Bitcoin’s total hashrate, according to Hashrate Index, meaning that it contributes about as much to the network as Norway.

That’s despite the fact that the Ethiopian federal government has a shaky control over the country’s overall territory. Hundreds of thousands of Ethiopians were killed in the government’s war against the Tigray People’s Liberation Front between 2020 and 2022, and the state only just signed a peace treaty in December with the Oromo Liberation Army, which it had been fighting in some form or other since the 1970s.

When asked whether BIT Mining had concerns about the social unrest in the country, Yang replied that the firm had been “studying, researching and also visiting [Ethiopia] several times, just [ascertain] that it’s a stable place.” The decision was made to purchase a facility instead of building it from scratch to avoid any unforeseen trouble, he said.

Even so, it was a challenge convincing BIT Mining employees to move to Ethiopia from their previous domiciles in the U.S. or China, Yang said.

“People obviously like to live and work in richer and safer countries,” he said. While a third of the facility’s operating team are foreign right now, the team will be composed of mostly locals down the line, he said.

In the meantime, the company is on the lookout for new investments in the country — be them energy infrastructure projects, data centers for artificial intelligence (AI) purposes, or other bitcoin mining facilities.

“There’s plenty of opportunities in Ethiopia,” Yang said. “The AI thing… We’ve been studying it for the last six to nine months. We have the power. We have the people. We have the ability to do it. But [the whole process] is very capital heavy. Construction in the U.S. is a lot more expensive, so it’s very hard to do a pilot experiment, but it’s a lot easier to [try one] in Ethiopia.”

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U.S. Law Enforcement Seizes $31M in Crypto Tied to Uranium Finance Hack

Published

2 часа ago

24 февраля, 2025

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U.S. authorities have seized about $31 million in crypto tied to the 2021 hack of Uranium Finance, according to a Monday X post from the Southern District of New York (SDNY).

According to the post, the seizure was the result of a joint effort between SDNY and Homeland Security Investigations (HSI) in San Diego. A spokesperson for SDNY did not return CoinDesk’s request for comment before press time, and no further details about the seizure or any related investigation were immediately available.

Uranium Finance was essentially a clone of automated market maker (AMM) Uniswap deployed on Binance’s BNB chain (then called Binance Smart Chain). In April 2021, a hacker exploited a bug in Uranium’s pair contracts to steal $50 million in various tokens. At the time of the incident, the Uranium Finance hack was one of the largest monetary exploits in decentralized finance (DeFi) history.

After the exploit, the hacker attempted to launder a portion of the funds in a variety of ways, including using crypto mixer Tornado Cash, depositing small amounts of crypto into centralized exchanges, and, according to blockchain sleuth ZachXBT, perhaps through purchasing rare and highly valuable Magic: The Gathering trading cards.

Uranium Finance shuttered after the hack, leaving victims without answers or financial restitution. The partial recovery, which comes nearly four years after the initial attack, offers the first glimmer of hope for victims to see some of their money returned.

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Ethereum’s Pectra Upgrade Goes Live on ‘Holesky’ Testnet, But Fails to Finalize

Published

2 часа ago

24 февраля, 2025

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Ethereum’s Pectra upgrade went live on the Holesky testnet on Monday but failed to finalize in the expected time.

Pectra was activated on the Holesky testnet at 21:55 UTC (4:55 p.m. ET), but did not initially finalize according to blockchain data.

Finality is the state in which, once a transaction is confirmed and added to a block, it is immutable and cannot be reversed. A testnet is a network that copies a main blockchain (in this case Ethereum), and is used to test upgrades or new code before it goes to the main network.

It is not immediately clear why the Pectra upgrade did not finalize on Holesky. Ethereum developers were discussing Monday over the Eth R&D Discord channel what the issue could be.

This is not the first time an upgrade has not finalized on an Etheruem test network. In January 2024, when the developers were testing the Dencun upgrade, the hard fork did not initially finalize on the Goerli testnet.

What is Pectra?

The Pectra hard fork combines together 11 major upgrades, or «Ethereum improvement proposals» (EIPs), into one package. At the heart of this is EIP-7702, which is supposed to improve the user-experience of crypto wallets. The proposal, which was scribbled by Ethereum co-founder Vitalik Buterin in just 22 minutes, will allow wallets to have some smart contract capabilities, as part of a broader strategy to bring account abstraction to Ethereum — a concept that makes the usability of wallets a lot less clunky.

Another key proposal, EIP-7251, will allow validators to increase the maximum amount they can stake from 32 to 2,048 ETH. The proposal is supposed to ease some of the technicalities that validators who stake ETH face today: Those that stake more than their 32 ETH have to spread that across multiple validators, making the process a bit of a nuisance. By lifting the maximum stake limit and combining those validators, it could speed up the process of setting up new nodes.

Holesky is the first of two testnets to run through a simulation of Pectra. The next test is supposed to occur on the Sepolia testnet on Mar. 5. But according to Christine Kim, a Vice President of Research at Galaxy, developers could delay it depending on the scale of today’s issue.

After Pectra goes live on both testnets, developers will ink in a final date to activate the upgrade on mainnet.

Pectra was originally on track to be Ethereum’s biggest upgrade to date, and it’s the first big change to the blockchain in almost a year. Developers decided that Pectra was too ambitious, and they agreed to split the original package into two.

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Bitcoin Slips Under $94K as Stocks Try to Shake Last Week’s Jitters

Published

3 часа ago

24 февраля, 2025

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Bitcoin (BTC) continued to slide on Monday, hurt by not just by massive bearish price action in most of the rest of crypto, but also as U.S. stocks struggle to pull out of their recent downturn.

Falling to about $93,900 as stocks closed, bitcoin is down 1.9% in the last 24 hours. Ether (ETH) is lower by 5.9% over the same time frame. The broader CoinDesk 20 Index is down 5.1%.

Following last week’s major declines, an attempted rally by the major U.S. stock averages failed Monday afternoon, with the Nasdaq closing down another 1.2% and the S&P 500 0.5%.

The worst performer among the major cryptos was solana’s (SOL), down nearly 10% over the past 24 hours and a whopping 41% over the past month. In addition to its role in what appears to be a fading memecoin craze, SOL is also facing token unlocks in March and a 30% increase in SOL inflation due to the recent implementation of SIMD-96, which adjusted the network’s fee structure. At $151 at press time, SOL has now more than given up its post-election gains.

“Trying to communicate to folks who may be feeling complacency/denial that $95,000 is still not a bad exit price relative to where I think we could trade in 6-12 months,” Quinn Thompson, founder of Lekker Capital, a crypto hedge fund that specializes in using macroeconomic data for its trades, posted on social media.

Thompson estimated that there was an 80% chance that bitcoin won’t make new highs over the next three months and a 51% chance we won’t see new highs for even the next 12 months.

Turning to the U.S. economy, Neil Dutta, head of economic research at Renaissance Macro Research, said risks to the labor market are growing. Real incomes are slowing down, the housing market is getting worse, state and local governments are pulling back on spending. Worryingly, market consensus sees no economic slowdown in sight, with GDP median forecast at roughly 2.5%.

“If 2023 was about being surprised to the upside, there is more risk in 2025 of being surprised to the downside,” Dutta wrote.

“A passive tightening of monetary policy is the dominant risk and that has important implications for financial market investors,» Dutta continued. «I would anticipate a decline in longer-term interest rates and a selloff in equity prices as risk appetite wanes. For the economy, expect conditions to deteriorate in the jobs market.”