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Bitcoin Brought Electricity to Countries in the Global South

Blog Post | Adoption of Technology

Bitcoin Brought Electricity to Countries in the Global South

It won’t be the United Nations or rich philanthropists that electrifies Africa.

Summary: Energy is indispensable for societal progress and well-being, yet many regions, particularly in the Global South, lack reliable electricity access. Traditional approaches to electrification, often reliant on charity or government aid, have struggled to address these issues effectively. However, a unique solution is emerging through bitcoin mining, where miners leverage excess energy to power their operations. This approach bypasses traditional barriers to energy access, offering a decentralized and financially sustainable solution.

Energy is life. For the world and its inhabitants to live better lives—freer, richer, safer, nicer, and more comfortable lives—the world needs more energy, not less. There are no rich, low-energy countries and no poor, high-energy countries.

“Energy is the only universal currency; it is necessary for getting anything done,” in Canadian-Czech energy theorist Vaclav Smil’s iconic words.

In an October 2023 report for the Alliance for Responsible Citizenship on how to bring electricity to the world’s poorest 800 million people, Robert Bryce, author of A Question of Power: Electricity and the Wealth of Nations, sums it as follows:

Electricity matters because it is the ultimate poverty killer. No matter where you look, as electricity use has increased, so has economic growth. Having electricity does not guarantee wealth. But its absence almost always means poverty. Indeed, electricity and economic growth go hand in hand.

To supply electricity on demand to many of those people, especially in the Global South, grids need to be built in the first place and then have enough extra capacity to ramp up production when needed. That requires overbuilding, which is expensive and wasteful, and the many consumers of the Global South are poor.

Adding to the trouble are the abysmal formal institutions of property rights and rule of law in many African countries, and the layout of the land becomes familiar: corruption and fickle property rights make foreign, long-term investments basically impossible; poor populations mean that local purchasing power is low and usually not worth the investment risk.

What’s left are slow-moving charity and bureaucratic government development aid, both of which suffer from terrible incentives, lack of ownership, and running into their own sort of self-serving corruption.

In “Stranded,” a long-read for Bitcoin Magazine, Human Rights Foundation’s Alex Gladstein accounted for his journey into the mushrooming electricity grids of sub-Saharan Africa: “Africa remains largely unable to harness these natural resources for its economic growth. A river might run through it, but human development in the region has been painfully reliant on charity or expensive foreign borrowing.”

Stable supply of electricity requires overbuilding; overbuilding requires stable property rights and rich enough consumers over which to spread out the costs and financially recoup the investment over time. Such conditions are rare. Thus, the electricity-generating capacity won’t be built in the first place, and most of Africa becomes dark when the sun sets.

Gladstein reports that a small hydro plant in the foothills of Mount Mulanje in Malawi, even though it was built and financed by the Scottish government, still supplies exorbitantly expensive electricity—around 90 cents per kilowatt hour—with most of its electricity-generating capacity going to waste.

What if there were an electricity user, a consumer-of-last-resort, that could scoop up any excess electricity and disengage at a moment’s notice if the population needed that power for lights and heating and cooking? A consumer that could co-locate with the power plants and thus avoid having to build out miles of transmission lines.

With that kind of support consumer—guaranteeing revenue by swallowing any excess generation, even before any local homes have been connected—the financial viability of the power plants could make the construction actually happen. It pays for itself right off the bat, regardless of transmissions or the disposable income of nearby consumers.

If so, we could bootstrap an electricity grid in the poorest areas of the world where neither capitalism nor central planning, neither charity worker nor industrialist, has managed to go. That consumer of last resort could accelerate electrification of the world’s poorest and monetize their energy resilience. That’s what Gladstein went to Africa to investigate the bourgeoning industry of bitcoin miners electrifying the continent.

Bitcoin Saves the World: Energy-Poverty Edition

Africa is used to large enterprises digging for minerals. The bitcoin miners springing forth all over the continent are different. They don’t need to move massive amounts of land and soil and don’t pollute nearby rivers. They operate by running machines that guess large numbers, which is the cryptographic method that secures bitcoin and confirms its transaction blocks. All they need to operate is electricity and an internet connection.

By co-locating and building with electricity generation, bitcoin miners remove some major obstacles to bringing power to the world’s poorest billion. In the rural area of Malawi that Gladstein visited, there was nowhere to offload the expensive hydro power and no financing to connect more households or build transmission lines to faraway urban areas: “The excess electricity couldn’t be sold, so the power stations built machines that existed solely to suck up the unused power.”

Bitcoin miners are in a globally competitive race to unlock patches of unused energy everywhere, so in came Gridless, an off-grid bitcoin miner with facilities in Kenya and Malawi. Any excess power generation in these regions is now comfortably eaten up by the company’s onsite mining machines—the utility company receiving its profit share straight in a bitcoin wallet of its own control, no banks or governments blocking or delaying international payments, and no surprise government currency devaluations undercutting its purchasing power.

No aid, no government, no charity; just profit-seeking bitcoiners trying to soak up underused energy. Gladstein observes:

One night during my visit to Bondo, Carl asked me to pause as the sunset was fading, to look at the hills around us: the lights were all turning on, all across the foothills of Mt. Mulanje. It was a powerful sight to see, and staggering to think that Bitcoin is helping to make it happen as it converts wasted energy into human progress. . . .

Bitcoin is often framed by critics as a waste of energy. But in Bondo, like in so many other places around the world, it becomes blazingly clear that if you aren’t mining Bitcoin, you are wasting energy. What was once a pitfall is now an opportunity.

For decades, our central-planning mindset had us “help” the Global South by directing resources there—building things we thought Africans needed, sending money to (mostly) corrupt leaders in the hopes that schools be built or economic growth be kick-started. We squandered billions in goodhearted nongovernmental organization projects.

Even for an astute and serious energy commentator as Bryce, not once in his 40-page report on how to electrify the Global South did it occur to him that bitcoin miners—the very people who are turning the lights on for the poorest in the world—could play a crucial role in achieving that.

It’s so counterintuitive and yet, once you see it, so obvious. In the end, says Gladstein, it won’t be the United Nations or rich philanthropists that electrifies Africa “but an open-source software network, with no known inventor, and controlled by no company or government.”

Live Science | Science & Technology

“Digital Twin” of Earth Could Make Super Fast Weather Predictions

“Scientists have created a ‘digital twin’ of our planet that can be used to predict weather far faster than traditional services.

The technology could help prevent some of the catastrophic impacts of disasters such as typhoons and flooding. The intensive data-crunching system could also give us a more detailed view of the future effects of climate change and reveal clues about how to mitigate it.”

From Live Science.

Our World in Data | Pollution

Oil Spills from Tankers Have Fallen by More than 90% since the 1970s

“In the 1970s, oil spills from tankers — container ships transporting oil — were common. Between 70 and 100 spills occurred per year. That’s one or two spills every week.

This number has fallen by more than 90% since then. In the last decade, no year has had more than eight oil spills, as shown in the chart.

The quantity of oil spilled from tankers has also fallen dramatically. Over the last decade, the average is less than 10,000 tonnes per year, compared to over 300,000 tonnes in the 1970s.”

From Our World in Data.

The Hill | Pollution

US Emissions Fell 17 Percent from 2005 Levels

“Net U.S. emissions increased by 1.3 percent in 2022 for a total of 5,489 million metric tons of carbon dioxide compared to the previous year, according to the EPA. The agency attributed the bulk of the increase to higher levels of fossil fuel combustion as the economic rebound and lifting of pandemic-related restrictions that began in 2021 continued.

Despite the year-over-year increase, however, the EPA determined that net emissions fell 16.7 percent compared to 2005 levels between 1990 and 2022. This decrease was partly due to a decline in emissions from industry over the last decade, according to the EPA. The agency attributed this drop to several factors, including macroeconomic trends like the shift from a manufacturing-based economy to a service-based economy. Improvements in energy efficiency also played a role, as did transitions to lower-carbon fuels.”

From The Hill.

Blog Post | Natural Disasters

Thousands of Deaths Averted in Taiwan Earthquake

A headline of progress that you might have missed.

Summary: Amidst the recent devastation caused by a significant earthquake in Taiwan on April 3, the nation’s response showcased its progress in earthquake readiness, often overlooked in the headlines. Since the 1999 Jiji earthquake, Taiwan has made substantial strides in fortifying its infrastructure, improving construction standards, and advancing early-warning systems. This can serve as a model for global disaster preparedness.

In the early hours of April 3, 2024, Taiwan was struck by a significant earthquake, with its epicenter located off the eastern coast. The quake, which was the strongest to hit Taiwan in 25 years and measured 7.4 on the Richter scale, sent tremors rippling across the island and awakened memories of past devastation. At the time this was published, the earthquake and subsequent tremors have claimed just under 20 lives and injured at least 1,099 people.

However, amid the destruction, injury, and loss of life, Taiwan’s response showcased a remarkable display of resilience and preparedness, underscoring the nation’s progress in earthquake readiness. It’s a story largely missing from the headlines.

For Taiwan, situated in the seismically active Ring of Fire in the Pacific Ocean, earthquakes are not unfamiliar. The island has endured numerous seismic events throughout its history, each leaving an indelible mark on Taiwan’s cities and people. The devastating 1999 Jiji earthquake, similar in magnitude to the April 3 quake, claimed more than 2,400 lives, injured more than 11,000 people, resulted in roughly $300 billion in damages, and caused widespread destruction; it served as a wake-up call for Taiwan to bolster its preparedness and earthquake response mechanisms.

In the decades since, Taiwan has made large strides in fortifying its infrastructure, implementing rigorous building codes, and fostering a culture of earthquake preparedness. These efforts were evident in the aftermath of the recent earthquake, where the impact, though significant, was mitigated in no small part by the progress Taiwan made toward earthquake readiness and response in the decades following the 1999 Jiji quake.

Image of the city of Taipei at night in the 8-bit art style
“Taipei 101 at night, in the style of 8-bit art—ar 16:9,” Midjourney, Generative Image AI, @tonymmorley

One of the cornerstones of Taiwan’s earthquake preparedness strategy is its robust infrastructure resilience. The country has invested heavily in constructing buildings, bridges, and critical infrastructure engineered to withstand seismic forces. Strict building codes, enforced through rigorous inspections and regulations, ensure that new structures adhere to stringent seismic standards. Additionally, retrofitting programs have been implemented to reinforce older buildings, reducing their vulnerability to earthquake damage. Such measures undoubtedly played a crucial role during the April 3 earthquake, preventing widespread collapse and minimizing casualties, injuries, and infrastructure damage.

Taiwan’s advanced early-warning system likely played a nontrivial role in mitigating the quake’s impact. The nation’s seismic network, comprising a dense array of sensors strategically positioned across the island, provides real-time data on seismic activity. This allows authorities to issue timely alerts, giving residents precious seconds to take cover and emergency services valuable time to prepare. The effectiveness of this system was demonstrated during the recent earthquake, with warnings disseminated swiftly, enabling individuals to seek shelter and prepare for the quake and, following aftershocks, minimizing the risk of injury. As an NBC News report says:

Taiwan’s sophisticated early-warning system is also an important part of its safety infrastructure. The system relies on an islandwide network of seismic instruments; when a large quake happens, the system sends messages to people’s phones and automatically cuts into live TV programming to give residents seconds of warning.

Taiwan’s success in preparing for and averting the worst-case scenario following such a large quake is part of a larger global trend of preparedness and resilience in the face of natural disasters. Annual deaths resulting from natural disasters of all types have been trending downward globally for over a century. Global economic growth has improved civilization’s capacity to build better structures, fortify critical infrastructure, and bolster emergency response, and the results are evident, both on the ground and in the data. In the last century, from 1920 to 2020, annual deaths from disasters fell from 523,892 to 41,046; still far too many individual human tragedies but also remarkable human progress.

Bar chart displaying the annual number of deaths from disasters between 1900 and 2020

Taiwan’s emphasis on public education and community preparedness has fostered a resilient society capable of responding effectively to seismic events. Through widespread awareness campaigns, educational programs, and drills, Taiwan has empowered its citizens with the knowledge and skills necessary to navigate emergencies confidently. Schools, workplaces, and households routinely conduct earthquake drills, ensuring that individuals are well versed in evacuation procedures.

Furthermore, Taiwan’s commitment to technological innovation has yielded groundbreaking solutions to enhance earthquake preparedness. The development of cutting-edge seismological research and monitoring technologies has enabled scientists to gain deeper insights into earthquake behavior, facilitating more accurate predictions and risk assessments. Additionally, advancements in engineering and construction techniques have led to the creation of innovative seismic-resistant materials and designs, further bolstering the resilience of infrastructure.

The recent earthquake in Taiwan serves as a sobering reminder of the ever-present threat posed by seismic activity. However, it also stands as a testament to Taiwan’s remarkable progress in earthquake and disaster preparedness. Through strategic investments, carefully considered regulation, and proactive measures, Taiwan has transformed itself into a global leader in earthquake resilience. The nation’s ability to withstand and recover from seismic events exemplifies the power of foresight, collaboration, and innovation in building a safer, more resilient future.

As Taiwan continues to navigate the complex challenges posed by natural disasters, the lessons gleaned from its experiences serve as invaluable guideposts for nations worldwide. By prioritizing preparedness, investing in resilient infrastructure, and building effective detection and communication systems, countries can mitigate the impact of earthquakes and safeguard the lives and livelihoods of their citizens. At the time of this writing, many families are still missing loved ones, and the economic costs and lives lost have yet to be fully understood. However, the progress in disaster preparedness made in the past two decades has undoubtedly saved many hundreds if not thousands of lives.

This article was published at the Progress Forum on 4/4/2024.