Bitcoin Mining Could Be The Answer To Nigeria’s Inflationary Crisis

Renewable vigor potential, wide adoption and deflationary fiat marque Nigeria the cleanable location for extended bitcoin mining operations.

This is an sentiment editorial by Heritage Falodun, a bundle technologist and co-host of the “Bitcoin In Nigeria” podcast.

The purpose of this enactment is to springiness a brief, concise but insightful elucidation astir the economical meltdown and biology degradation successful Nigeria, portion besides proposing Bitcoin mining done renewable vigor sources arsenic a solution to those problems.

This papers analyzes and showcases the complexity astir electrical vigor sources that person been explored, and the interaction of specified exploration to the country’s ecosystem.

Observed disposable renewable vigor sources should beryllium explored for mining Bitcoin successful Nigeria successful bid to spur the nation's maturation economically, and concurrently to service arsenic a notation constituent for curbing biology degradation and climatic havoc caused by c emissions from fossil fuels and gas.

Introduction

Bitcoin mining is the process of creating caller integer tokens and adding past transaction records to a nationalist blockchain ledger.

Bitcoin mining requires blase hardware, specialized computers called ASIC miners for solving analyzable mathematics problems, and arsenic a reward, miners gain caller bitcoin and cod transaction fees connected each valid transaction successful the block, which is what has been instrumental successful keeping the Bitcoin web active. Miners tin beryllium funny individuals oregon nonrecreational mining firms. The bitcoin mining process is yet a proof-of-work statement mechanism.

The archetypal miner to lick a cryptographic puzzle receives bitcoin for expending computing vigor and validating the transaction “block.” Bitcoin’s pseudonymous founder, Satoshi Nakamoto, primitively implemented a bounds of 1 megabyte of transaction information per block.

The inventor of Bitcoin besides acceptable a hard bounds connected bitcoin’s proviso astatine 21 cardinal bitcoin. Miners person mined much than 90% of the disposable bitcoin. Every 4 years, the fig of bitcoin awarded for solving caller blocks is halved, which is simply a process known arsenic Bitcoin halving.

This is simply a diagnostic that is wide believed to corroborate the principles of economics and scarcity. Based connected this schedule, it could beryllium a fewer decades earlier the last bitcoin is mined. However, these hardware devices that alteration Bitcoin mining indispensable beryllium powered by energy and the mode of generating this electrical vigor from antithetic vigor sources without causing biology havoc and climatic degradation is of utmost importance. Generating electrical vigor from greenish and renewable vigor sources has been the champion enactment for the Bitcoin mining ecosystem globally.

A survey by CoinShares estimated that, arsenic of 2019, astatine slightest 74% of cryptocurrency’s planetary vigor depletion came from renewables, mostly successful the signifier of comparatively cheap, Chinese hydropower.

Bitcoin being a global, decentralized currency which is simply a censorship-resistant, deflationary asset, arsenic opposed to the inflationary Nigerian naira, means Bitcoin volition beryllium the champion stake for revitalizing Nigeria’s system if information are enactment successful spot to initiate Bitcoin mining concern powered by the various, unexplored renewable and greenish vigor sources disposable successful Nigeria, one of the starring countries successful planetary Bitcoin adoption.

An Overview Of Nigeria’s Economy

Nigeria’s system remains the biggest system successful Africa, contempt the challenges that person been dwindling its maturation implicit the years.

According to Heritage.org:

“Nigeria's economical state people is 54.4, making its system the 124th freest successful the 2022 Index. Nigeria is ranked 23rd among 47 countries successful the Sub-Saharan Africa region, and its wide people is supra the determination mean but beneath the satellite average. In the long-term, Nigeria GDP is projected to inclination astir 445.00 USD Billion successful 2022 and 450.00 USD Billion successful 2023, according to our econometric models. The gross home merchandise (GDP) measures nationalist income and output for a fixed country's economy. Nigeria gdp for 2020 was $432.29B, a 3.53% diminution from 2019. Nigeria gdp for 2017 was $375.75B, a 7.14% diminution from 2016.” 

However, ostentation has been eating heavy into the Nigeria economical market, driving the outgo of nutrient determination up by astir 26% implicit the past year.

Nigeria Has A Carbon Emission Problem

Fixing c emanation hasn't played retired arsenic a precedence for the authorities docket successful Nigeria yet, arsenic demonstrated by the expanding levels of c emissions there. Carbon dioxide emissions stem from the burning of fossil fuels. They see c dioxide produced during the depletion of solid, liquid and state fuels and state flaring. Nigeria’s c (CO2) emissions for 2018 was 130,670 kilotons (kt), a 15.72% summation from 2017.

Can Nigeria Take Advantage Of Renewable Energy Sources?

Nigeria has the required infrastructure, climate, expertise, arsenic good arsenic quality superior to instrumentality vantage of renewable vigor sources.

“In 2018, the stock of vigor derived from renewable vigor sources successful superior vigor depletion amounted to astir 75.4 percent successful Nigeria,” according to Statista. “It is projected that the renewable vigor stock of full last vigor depletion successful Nigeria volition scope 86.4 percent by 2025.”

Unexplored Energy Sources For Nigeria

Solar Energy: According to Solynta Energy, determination is an mean of 1,885 hours of sunlight per year, with an mean of 5 hours and 9 minutes of sunlight per time successful Lagos. It is sunny for 43% of daylight hours there.

“Solar panels are known to work(although babelike connected the design) with an mean highest sunlight hr of 3.5 hrs,” per Solynta, frankincense indicating that star powerfulness would beryllium a feasible vigor root successful a Nigerian metropolis similar Laos.

Hydroelectric Energy: To my knowledge, the lone large rivers that are being explored for hydroelectric powerfulness successful Nigeria are the Kanji, Shiroro, Niger and Benue. According to caller research, 32 exploitable hydropower sites person been observed successful Nigeria with a full installed capableness of 12.22 gigawatts (GW).

But Nigeria is bestowed with many rivers and earthy falls that could favour the initiation of much hydropower systems.

Explored Energy Sources For Nigeria

Electricity successful Nigeria is generated done thermal and hydropower sources. Most energy procreation successful Nigeria comes from fossil fuels, peculiarly gas, which makes up 86% of the capableness successful Nigeria, with the remainder generated from hydropower sources.

A accordant summation successful c emissions successful Nigeria is likely.

Bitcoin Mining Powered By Renewable Energy Is The Future Of Nigeria

With the abundance of renewable vigor sources successful Nigeria, arsenic explained above, Nigeria should see mining Bitcoin with these vigor sources.

Bitcoin ecosystem probe released successful January by the Bitcoin Mining Council stated that, successful the 4th fourth of 2021, the worldwide Bitcoin mining assemblage was being powered by astir 58.5% renewable energy. I judge that Nigeria shouldn’t beryllium near retired of this emerging marketplace arsenic it stands a accidental of boosting its economy.

The mining information shows that a caller hybrid exemplary for Bitcoin mining has emerged. Bitcoin miners tin easy bargain vigor from renewable vigor providers erstwhile vigor is abundant, oregon make a backstage operation and superior astir generating electrical vigor from greenish and renewable energies arsenic portion of their setup costs and implementation capital. In truthful doing, the miners are monetizing renewable assets that would person different been dumped oregon ignored, portion maintaining a mostly precocious uptime and harmless situation and contributing to the country’s economy.

Taking a look astatine an existing mining workplace successful Alberta, Canada, tally by Hut 8 Mining, for example: The bitcoin generated from its archetypal 4th 2022 mining rewards was 942 BTC. If akin mining farms were implemented crossed 36 locations successful Nigeria — a tenable fig based connected my probe into locations wherever this would beryllium feasible — that could output immoderate 33,912 BTC successful 1 4th if conditions were the same, worthy astir $712 cardinal astatine the clip of penning this.

Conclusion

Bitcoin being a deflationary currency which serves arsenic the reward for mining makes it an concern root susceptible of boosting Nigeria’s internally-generated gross with astir $2.84 cardinal per twelvemonth (based connected the $712 cardinal presumption from above, multiplied crossed 4 quarters), assuming the authorities taxed privately-owned Bitcoin mining farms.

But the mining farms indispensable beryllium powered by renewable and greenish vigor sources specified arsenic star vigor and hydroelectric vigor sources. This volition beryllium a cleanable mode of utilizing the imaginable energy that could beryllium generated from an mean of 1,885 hours of sunlight per twelvemonth successful places similar Laos. Hydroelectric powerfulness plants precise often substitute powerfulness procreation from fossil fuels, frankincense reducing issues similar acerb rain, c emissions and smog.

The unexplored, imaginable electrical vigor that tin beryllium generated from hydro sources successful Nigeria should beryllium developed, and federation states with government-owned and privately-owned Bitcoin mining infrastructure, specified arsenic El Salvador, Canada and immoderate parts of the United States, should beryllium considered arsenic notation points successful this context.

This is simply a impermanent station by Heritage Falodun. Opinions expressed are wholly their ain and bash not needfully bespeak those of BTC Inc oregon Bitcoin Magazine.