This is a new economic lifeline for the park, which according to Gouspillou only receives around $100,000 per year from the Congolese government, but has a monthly operating budget of around $1,000,000.
There is another Virunga hydro project in the works, a 30 MW dam, on a different river nearby, to be financed by the EU. This time, the park is already planning to use some of that energy for Bitcoin mining as a bridge. Eventually, these dams could support the millions of people who live around the park territory, and constitute an “ambitious attempt not only to protect Virunga — Africa’s oldest national park — from threats including armed rebels, deforestation and oil prospectors, but to jump-start the local economy and potentially help stabilize one of the world’s worst conflict zones.”
Hundreds of millions of people today still live without access to electric grids, and most are located in sub-Saharan Africa. As of 2019, just 8.7% of the Congolese population had access. The numbers are similar or worse in South Sudan, Somalia, Libera, Sierra Leone, Chad, Niger, Malawi and the Central African Republic, with only a few governments on the African continent able to provide electricity to more than 50% of their population. In countries like the Congo, electrification is expanding more slowly than population growth.
Traditionally, citizens without electricity cut down trees for charcoal to help cook their meals, releasing significant amounts of carbon into the atmosphere. Burning biofuels for cooking and heating is also a leading cause of indoor air pollution worldwide, leading to 1.6 million deaths per year, half of which are children under five. But if Bitcoin mining can be a bridge to help subsidize and encourage more hydro power to come online, it could be a worthy project for humanitarians to target to help stop deforestation, protect the local environment and empower the people. According to the International Food Policy Research Institute , the Congo “has the potential to become the breadbasket of the entire African continent.”
UN research states that getting electricity to those without it requires “increased private financing and adequate policy and fiscal incentives to spur faster development of new technologies.”
Bitcoin could very well be a mechanism to help align incentives and spark more electricity and agriculture for a part of the world that is underdeveloped and dependent on imports.
There are different models of how aid could work in this scenario. In a “less mature” model, a company like Gouspillou’s BigBlock might be paid to handle everything and simply deliver a profit share to a local partner. In a “more mature” model, they could be contracted to just handle setup and training, and leave everything else behind for local authorities to run. In the latter model, one can begin to see how the inclusive economy could grow.
In this way, humanitarian aid could help strengthen local communities and bootstrap them so they can be in control of their own destiny, making them more productive and sovereign. There are already many such projects to give electricity to small communities away from population centers across Africa, Gouspillou said, and Bitcoin mining can make them much more profitable and effective. What if the Gates Foundation or the EU, for instance, announced $100 million per year to finance Bitcoin mining in Africa? With ongoing innovation in satellite internet connectivity, monetizing energy sources in remote regions becomes more compelling over time.
Gouspillou said the grid in his native France is still 70% nuclear, a legacy of Charles de Gaulle’s vision for energy independence. But none of it is used for Bitcoin mining, something Gouspillou called a big mistake. He estimated that if just 2% of the output of the nuclear system was directed toward Bitcoin mining, it could be enough to overcome the state electric company’s recent financial difficulties and put it back in the black. During the summers and at night, there is less demand on the grid, but today, that energy goes unused. Gouspillou said these times would be perfect occasions to flex in Bitcoin mining. But the authorities, he said, are clueless, and he loses sleep thinking about the wasted opportunities.
To this end, Bitcoin could eventually play a significant role in helping to incentivize nuclear energy. Dozens of emerging market countries are exploring nuclear energy as a way to achieve energy independence. But according to the World Nuclear Association, the size of their grid systems is a major issue, as “many nuclear power plants are larger than the fossil fuel plants they supplement or replace.” But again, with Bitcoin, any excess energy can be directed to mining until the communities around the plant catch up. The idea of using Bitcoin to harness curtailed energy holds for developed countries too, of course. Germany, for example, has famously created more wind power than it can use.
A near-complete disregard for Bitcoin is chronic across the entire international development space, which has until this point not realized or ignored the currency’s potential to reduce corruption and spark economic activity. Too many humanitarians have fallen victim to the mirage of “blockchain not Bitcoin” narratives, which have wasted hundreds of millions of dollars.
The French story unfolds to a much more depressing vision across the developing world, where many nations have abundant wind, solar, hydro and even uranium resources, but lack the grid infrastructure and concentrated demand to take advantage. Gouspillou sees Bitcoin mining, powered by humanitarians or investors, as the way to bootstrap this all into place.
Today, just 4% of the world’s population has the exorbitant privilege of creating the global reserve currency. But in a potential future where Bitcoin is that reserve currency, mining from renewable sources could help empower any nation to directly earn the future base money of the world. And this could provide a massive incentive to continue expansion and innovation in renewable energy systems. “This,” Gouspillou said, “is the beautiful dream.”
V. Avoiding Pitfalls
If humanitarian organizations, foundations and foreign offices could support Bitcoin mining operations at renewable energy sites, that could be a trigger for sustainable local economic activity.
Consider how in Norway, the Sovereign Wealth Fund, backed by oil, has financed some of the highest quality of life in the world. Could Sudan and Ethiopia, with massive wind and solar resources powering Bitcoin mining and a growing electric grid, be Norways of the future?
A rosy outcome, of course, is far from guaranteed. The big obstacles of corrupt local authorities and exploitative foreign corporations remain.
One way to neutralize this threat is for international donors to position Bitcoin mining projects as economic leverage opportunities, where they stipulate that part of the profits go towards microfinance or venture capital to form local businesses. If major foundations and governments can enforce these conditions in their deals setting up renewable mining infrastructure, they could have a lasting impact.
Even on the for-profit side, there is a possibility that foreign Bitcoin miners can operate in a non-extractive way. They can be paid to set up operations and train local staff, leaving some or all of the ongoing profits in the hands of the region. The population could then absorb the wealth from renewables, instead of seeing it slip away to foreign lands, as it often does. In this way, investing in Bitcoin payments and mining could be a compelling environmental, social and corporate governance (ESG) narrative moving forward.
A major challenge for Bitcoin is how to avoid the fate of gold, which as a historical reserve currency was plundered by colonial powers in places like the Congo. Later, the U.S. custodied gold inside its borders through Executive Order 6102, and finally, after the Bretton Woods agreement, centralized much of the gold held by other governments. This helped President Nixon in 1971 to essentially move gold out of the monetary system and neutralize its restraining effects on war spending. So, what is to stop this kind of exploitation and capture from happening to Bitcoin if it is being mined at renewable sites in developing countries?
Satoshi Nakamoto chose April 5 as their birthday, which was the day that Executive Order 6102 came into effect in 1933. They designed Bitcoin specifically to be resistant to this kind of capture. Because of its properties and the political incentives it creates, it will be difficult for one government to control all of the world’s mining, and domestically, impossible for governments to effectively stop citizens from using it.
After all, Bitcoin is invisible, can teleport from one end of the earth to the other in minutes, is programmable, easily divisible and its spending power can be easily stored in a variety of ways and formats by individuals, making it highly-confiscation resistant.
Gold and other mined commodities have none of these qualities, and have helped at times lead to extractive societies. Perhaps Bitcoin’s open and permissionless attributes can help lead the world in a more inclusive direction.
A final obstacle is that a huge global aid industry now runs on propping up societies that cannot stand on their own. This may sound cynical, but will large foundations and government agencies actually want to reduce bureaucracy, corruption and dependence through Bitcoin, if they themselves benefit from it?
For all of the hundreds of billions of dollars invested each year into international development to improve the lives of the most vulnerable, major obstacles remain.
This essay has examined how middleman corruption and forced dependency plague the humanitarian industry, and how a lack of infrastructure prevents emerging markets from capitalizing on stranded renewable energy resources. For anyone interested in overcoming these challenges, Bitcoin is worth a long look as a humanitarian and environmental tool for change.
Whether as a corruption-resistant, peer-to-peer rail for transferring funds abroad, a spark for economic independence, or a subsidy for sovereign renewable electrification in developing nations, Bitcoin’s future human impact outside of the traditional areas of finance and investing is just beginning to be understood.
This is a guest post by Alex Gladstein. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.
