Does Bitcoin hold the key to sustainable development in Africa… and the planet?
Today, over 620 million people live without access to electricity in sub-Saharan Africa; that’s twice the population of the United States without access to the modern day electrical conveniences and necessities that facilitate our lives and work each day. Africa is currently home to some of the world’s fastest growing economies, however, lack of affordable and reliable energy hinders tangible progress for much of its population.
In addition to housing some of the world’s most promising economies, Africa is the sunniest continent on Earth. Despite present issues surrounding energy access, favourable sun-light conditions and historically low solar-panel costs indicate that the cheapest and quickest way for Africa to become electrified in the future is through solar power. Unfortunately, investing in Africa can be problematic due to high levels of government corruption. Many believe that the advent of crypto-currency and blockchain technology may hold the solution. The Sun Exchange has taken the international remittance properties of Bitcoin and applied it into solving Africa’s energy crisis. Most solar panels in the world are installed on the roofs of commercial and industrial buildings such as factories and warehouses. This is not the case in many regions of Africa, where projects under $1million are left unfunded as debt from African banks is expensive and development banks won’t write cheques that small. To close this funding gap for solar energy, The Sun Exchange enables individuals around the world to purchase the photo-voltaic cells that make up the solar panels using Bitcoin micro-payments. Following the principles of crowd-funding, our solar projects are pre-financed, and only constructed once all available solar cells have been purchased. Once the solar plant is in operation, the owners of the solar cells receive a 20 year stream of passive Bitcoin income from the rental payments of the electricity user. This means the solar cell owners earn an average rate of return of 10% per annum for two decades. Income that was bought into existence because of Bitcoin was mined.
While Bitcoin’s potential to fuel investment in and distributed ownership of our future global energy supply is promising, the amount of energy that the Bitcoin mining network requires continues to draw criticism. Some claim that it will consume as much electricity as the country of Denmark by 2020. In view that The Sun Exchange enables Bitcoin to be used for financing renewable energy generation, how does this impact the Bitcoin ecosystems energy balance? No one knows for certain how much energy the Bitcoin network requires to run. In a recent Silicon Valley meetup, computer scientist Andreas Anonolpolis proposed that the Bitcoin mining network may require around 350MW of power to run, which is just over 3 TWh (terra watt hours) of electricity use each year. With an assumption that the majority of Bitcoin mining takes place in coal powered China, then the annual carbon emissions will be 3066000 metric tonnes. That’s double the carbon footprint of the world’s entire fleet of passenger-laden Boeing 747’s, if they were to fly continuously around the globe at once.
At a $1000 BTC price, one Bitcoin can be used to finance 1 kW of solar power plant. If that solar plant were to be installed in sunny but coal reliant and energy hungry Africa, 1kW of solar panels will generate 1800kWh of electricity per year, offsetting nearly 2 tonnes of carbon emissions. In this case, the energy it took to mine that Bitcoin (666kWh) will be paid back in just under 18 weeks. Given that a solar panel will carry on generating clean electricity for at least 25 years, a single Bitcoin used to fund solar energy actually creates a positive balance of 400000kWh (400MWh) of clean sun-powered electricity over the system’s lifespan. The Bitcoin that financed it still exist, and are being traded in the markets doing work.
Bitcoin is money created on a silicon chip powered by electricity. It can now be used to finance silicon chips that produce electricity which can be sold for money – are we potentially witnessing the dawn of a 100% silicon based clean energy economy? In Africa, that genie is now out of the bottle.