In 2023, 675 million people lacked access to electricity, according to the Alliance for Rural Electrification’s annual report, but potentially, Bitcoin mining could change that.

The report also identified distributed renewable energy, such as small-scale solar, wind, or hydro power plants that generate electricity near the point of use, as the most cost-effective way to provide electricity to underserved communities. However, these power plants are often not economically viable and typically rely on charity for their development.

Bitcoin’s insatiable demand for electricity, often a point of criticism, can in this case be of help by providing a constant demand for surplus electricity and improving the profitability of renewable energy projects.

Understanding bitcoin mining

Bitcoin mining serves a dual purpose: issuing new currency and verifying transactions. It involves an open competition in which the first ‘miner’ to solve a computational puzzle is rewarded with bitcoin.

However, the cryptocurrency has faced significant criticism for its high energy consumption, frequently making headlines for using more electricity than entire nations. Indeed, according to the Cambridge Bitcoin Electricity Consumption Index, Bitcoin’s energy consumption sits at 160 Terra Watt hours per year, placing it just above Poland.

How bitcoin mining accelerates electrification

But Bitcoin’s insatiable demand for electricity needn’t be a bad thing. Efforts to develop small-scale renewable power plants face mismatches between supply and demand. Making these projects viable often requires a much larger scale than the initial demand within rural communities. The intermittent nature of renewable energy exacerbates supply and demand mismatches. This means that energy providers overbuild capacity to meet demand at peak usage times, and without an effective way to store this excess energy, it is wasted.

Bitcoin mining offers a solution by acting as a ‘buyer of last resort’ for electricity in rural communities. Unlike traditional data centres, which require constant uptime for cloud computing services, bitcoin miners can be switched on and off at short notice. Additionally, bitcoin can be mined anywhere where there is power and an internet connection and turn otherwise wasted energy into bitcoin 24/7 365 days a year.

Gridless: putting theory into practice

Gridless is turning this concept into reality by building and managing five small bitcoin mining data centres in rural areas, all powered by small-scale renewable power plants. These mining sites, located across four countries in Africa, generate revenue that is shared between Gridless and the power provider, creating a sustainable model for both energy generation and bitcoin mining.

The company’s software, Gridless OS, monitors local electricity supply and demand in real-time. It calculates how much excess electricity is available, allowing the bitcoin mining operation to scale accordingly. This ensures that the local community’s energy needs are always prioritised, with bitcoin mining only using the excess electricity that would otherwise go unused.

Economic empowerment

Gridless views bitcoin mining as an economic enabler for renewable energy in rural Africa. By providing additional revenue for power providers, cost savings can be passed onto the local community through lower electricity bills, while making investment into new renewable energy projects more attractive.

Gridless is a founding member of the Green Africa Mining Alliance, established in 2022 to share knowledge and support new bitcoin miners across the continent.

Leadership and backing

The company is led by CEO Erik Hersman, a renowned entrepreneur in the African tech ecosystem. Hersman is the founder of Ushahidi, a crowdsourcing platform that has been used for crisis response and election monitoring.

He also founded BRCK, a company focussed on bringing reliable internet connectivity to remote parts of Africa. In December 2022, Gridless received a $2m seed investment led by Stillmark, a venture capital firm focused on Bitcoin companies, and Jack Dorsey’s payment company Block.

"Bitcoin mining supports rural electrification" was originally created and published by Verdict, a GlobalData owned brand.

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