That is an opinion editorial by Heritage Falodun, a software program engineer and co-host of the “Bitcoin In Nigeria” podcast.
The goal of this work is to offer a short, concise however insightful elucidation across the financial meltdown and environmental degradation in Nigeria, whereas additionally proposing Bitcoin mining by renewable vitality sources as an answer to these issues.
This doc analyzes and showcases the complexity round electrical vitality sources which were explored, and the impression of such exploration to the nation’s ecosystem.
Noticed obtainable renewable vitality sources needs to be explored for mining Bitcoin in Nigeria with a purpose to spur the nation’s progress economically, and concurrently to function a reference level for curbing environmental degradation and climatic havoc attributable to carbon emissions from fossil fuels and gasoline.
Introduction
Bitcoin mining is the method of making new digital tokens and including previous transaction information to a public blockchain ledger.
Bitcoin mining requires subtle {hardware}, specialised computer systems referred to as ASIC miners for fixing advanced math issues, and as a reward, miners earn new bitcoin and accumulate transaction charges on each legitimate transaction within the block, which is what has been instrumental in conserving the Bitcoin community energetic. Miners will be curious people or skilled mining companies. The bitcoin mining course of is finally a proof-of-work consensus mechanism.
The primary miner to resolve a cryptographic puzzle receives bitcoin for expending computing vitality and validating the transaction “block.” Bitcoin’s pseudonymous founder, Satoshi Nakamoto, initially applied a restrict of 1 megabyte of transaction knowledge per block.
The inventor of Bitcoin additionally set a tough restrict on bitcoin’s provide at 21 million bitcoin. Miners have mined greater than 90% of the obtainable bitcoin. Each 4 years, the variety of bitcoin awarded for fixing new blocks is halved, which is a course of referred to as Bitcoin halving.
This can be a characteristic that’s extensively believed to corroborate the ideas of economics and shortage. Based mostly on this schedule, it could possibly be a number of many years earlier than the ultimate bitcoin is mined. Nevertheless, these {hardware} units that allow Bitcoin mining have to be powered by electrical energy and the mode of producing this electrical vitality from totally different vitality sources with out inflicting environmental havoc and climatic degradation is of utmost significance. Producing electrical vitality from inexperienced and renewable vitality sources has been the best choice for the Bitcoin mining ecosystem globally.
A research by CoinShares estimated that, as of 2019, at the very least 74% of cryptocurrency’s world vitality consumption got here from renewables, principally within the type of comparatively low cost, Chinese language hydropower.
Bitcoin being a world, decentralized foreign money which is a censorship-resistant, deflationary asset, versus the inflationary Nigerian naira, means Bitcoin would be the greatest guess for revitalizing Nigeria’s financial system if consideration are put in place to provoke Bitcoin mining funding powered by the assorted, unexplored renewable and inexperienced vitality sources obtainable in Nigeria, one of many main nations in world Bitcoin adoption.
An Overview Of Nigeria’s Economic system
Nigeria’s financial system stays the most important financial system in Africa, regardless of the challenges which were dwindling its progress over time.
Based on Heritage.org:
“Nigeria’s financial freedom rating is 54.4, making its financial system the 124th freest within the 2022 Index. Nigeria is ranked twenty third amongst 47 nations within the Sub-Saharan Africa area, and its general rating is above the regional common however under the world common. Within the long-term, Nigeria GDP is projected to development round 445.00 USD Billion in 2022 and 450.00 USD Billion in 2023, in keeping with our econometric fashions. The gross home product (GDP) measures nationwide earnings and output for a given nation’s financial system. Nigeria gdp for 2020 was $432.29B, a 3.53% decline from 2019. Nigeria gdp for 2017 was $375.75B, a 7.14% decline from 2016.”
Nevertheless, inflation has been consuming deep into the Nigeria financial market, driving the price of meals there up by practically 26% over the past yr.
Nigeria Has A Carbon Emission Downside
Fixing carbon emission hasn’t performed out as a precedence for the federal government agenda in Nigeria but, as demonstrated by the rising ranges of carbon emissions there. Carbon dioxide emissions stem from the burning of fossil fuels. They embrace carbon dioxide produced in the course of the consumption of strong, liquid and gasoline fuels and gasoline flaring. Nigeria’s carbon (CO2) emissions for 2018 was 130,670 kilotons (kt), a 15.72% improve from 2017.
Can Nigeria Take Benefit Of Renewable Power Sources?
Nigeria has the required infrastructure, local weather, experience, in addition to human capital to make the most of renewable vitality sources.
“In 2018, the share of vitality derived from renewable vitality sources in main vitality consumption amounted to round 75.4 p.c in Nigeria,” in keeping with Statista. “It’s projected that the renewable vitality share of complete closing vitality consumption in Nigeria will attain 86.4 p.c by 2025.”
Unexplored Power Sources For Nigeria
Photo voltaic Power: Based on Solynta Power, there’s a median of 1,885 hours of daylight per yr, with a median of 5 hours and 9 minutes of daylight per day in Lagos. It’s sunny for 43% of daytime there.
“Photo voltaic panels are identified to work(though depending on the design) with a median peak daylight hour of three.5 hrs,” per Solynta, thus indicating that solar energy could be a possible vitality supply in a Nigerian metropolis like Laos.
Hydroelectric Power: To my information, the one main rivers which are being explored for hydroelectric energy in Nigeria are the Kanji, Shiroro, Niger and Benue. Based on latest analysis, 32 exploitable hydropower websites have been noticed in Nigeria with a complete put in capability of 12.22 gigawatts (GW).
However Nigeria is bestowed with many rivers and pure falls that might favor the initiation of extra hydropower programs.
Explored Power Sources For Nigeria
Electrical energy in Nigeria is generated by thermal and hydropower sources. Most electrical energy technology in Nigeria comes from fossil fuels, significantly gasoline, which makes up 86% of the capability in Nigeria, with the rest generated from hydropower sources.
A constant improve in carbon emissions in Nigeria is probably going.
| COMPANY | POWER TYPE | CAPACITY |
|---|---|---|
|
Kanji Jebba Energy Plc |
Hydro |
1,330 MW |
|
Ugheli Energy Plc |
Fuel |
942 MW |
|
Sapele Energy Plc |
Fuel |
1,020 MW |
|
Shiroro Energy Plc |
Hydro |
600 MW |
|
Afam Energy Plc |
Fuel |
987.2 MW |
|
Niger Delta Energy Holding Firm |
Fuel |
5,455 MW |
|
IPPs |
Fuel |
1,392 MW |
|
Egbin Energy Plc |
Fuel |
1,020 MW |
Bitcoin Mining Powered By Renewable Power Is The Future Of Nigeria
With the abundance of renewable vitality sources in Nigeria, as defined above, Nigeria ought to think about mining Bitcoin with these vitality sources.
Bitcoin ecosystem analysis launched in January by the Bitcoin Mining Council said that, within the fourth quarter of 2021, the worldwide Bitcoin mining sector was being powered by about 58.5% renewable vitality. I consider that Nigeria shouldn’t be not noted of this rising market because it stands an opportunity of boosting its financial system.
The mining knowledge reveals {that a} new hybrid mannequin for Bitcoin mining has emerged. Bitcoin miners can simply purchase vitality from renewable vitality suppliers when vitality is plentiful, or create a non-public construction and capital round producing electrical vitality from inexperienced and renewable energies as a part of their setup prices and implementation capital. In so doing, the miners are monetizing renewable belongings that might have in any other case been dumped or ignored, whereas sustaining a typically excessive uptime and protected atmosphere and contributing to the nation’s financial system.
Having a look at an current mining farm in Alberta, Canada, run by Hut 8 Mining, for instance: The bitcoin generated from its first quarter 2022 mining rewards was 942 BTC. If comparable mining farms have been applied throughout 36 areas in Nigeria — an inexpensive quantity primarily based on my analysis into areas the place this could be possible — that might yield some 33,912 BTC in a single quarter if circumstances have been the identical, value about $712 million on the time of scripting this.
Conclusion
Bitcoin being a deflationary foreign money which serves because the reward for mining makes it an funding supply able to boosting Nigeria’s internally-generated income with about $2.84 billion per yr (primarily based on the $712 million assumption from above, multiplied throughout 4 quarters), assuming the federal government taxed privately-owned Bitcoin mining farms.
However the mining farms have to be powered by renewable and inexperienced vitality sources comparable to photo voltaic vitality and hydroelectric vitality sources. This will probably be an ideal method of using the potential electrical energy that could possibly be generated from a median of 1,885 hours of daylight per yr in locations like Laos. Hydroelectric energy vegetation very continuously substitute energy technology from fossil fuels, thus lowering points like acid rain, carbon emissions and smog.
The unexplored, potential electrical vitality that may be generated from hydro sources in Nigeria needs to be developed, and nation states with government-owned and privately-owned Bitcoin mining infrastructure, comparable to El Salvador, Canada and a few components of america, needs to be thought-about as reference factors on this context.
This can be a visitor put up by Heritage Falodun. Opinions expressed are totally their very own and don’t essentially mirror these of BTC Inc or Bitcoin Journal.
