On September 1, Nana Kwame “Cheddar” Bediako, one of the most prominent independent candidates in Ghana’s upcoming general election, unveiled his political campaign manifesto.
In a presentation of the 12 pillars of his economic role, he outlined plans to build a technology hub where he said he would build more local data centers to be used for cryptocurrency mining.
Here’s why it’s not a good idea, especially in a country like Ghana.
What is cryptocurrency mining?
Cryptocurrency mining is the process that validates transactions and creates new digital currency, including Bitcoin. While it has been praised for its role in maintaining the security and integrity of blockchain networks, it has also faced criticism for its environmental, economic and social impacts.
Economic Considerations
From a financial perspective, the costs associated with crypto mining are significant. The initial investment in mining hardware can range from $2,000 to $20,000; making it a high barrier to entry for individual miners and even governments.
Additionally, ongoing electricity, cooling and maintenance costs add to the financial burden, with some estimates suggesting that the cost of mining a single Bitcoin can exceed its market value in various countries.
Energy Consumption and Climate Impacts
One of the most important concerns about crypto mining is the huge energy consumption. The process requires a significant amount of computing power, which translates into high electricity consumption.
Bitcoin mining itself consumes 121.36 terawatt hours (TWh) per yearwhich is more than the entire country of Argentina. This is due to the intensive computing power required to solve complex mathematical problems to verify transactions.
Ghana is experiencing electricity problems this year due to payment problems with independent power producers. The country also had power generation problems that led to blackouts in most parts of the country. Crypto mining is more likely to exacerbate the country’s issues.
E-Waste and Pollution
Crypto mining hardware has a relatively short lifespan, leading to significant amounts of e-waste. As technology advances and mining becomes more difficult, the turnover rate for mining equipment increases, exacerbating the problem of e-waste disposal.
Regulatory challenges and future perspectives
While cryptocurrency mining plays a critical role in the operation of digital currencies, its environmental and social costs cannot be ignored.
With some countries considering Central Bank digital currencies as well as fiat currencies, cryptocurrency mining may be imperative, especially for a country like Ghana that faces challenges such as energy production and e-waste issues.
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