Bitcoin miner Gridless, backed by Block, builds site at Kenya volcano

Jack Dorsey backed start-up taps into geothermal, hydro and solar power to run bitcoin mines across Africa

HELL’S GATE, Kenya — Two-and-a-half hours northwest of Nairobi by car, a small group of bitcoin miners set up shop at the site of an extinct volcano near Hell’s Gate National Park.

The mine, tucked away on the edge of Lake Naivasha, is operated by a startup called Gridless and consists of a single 500-kilowatt mobile container that, from the outside, looks like a small residential trailer.

Backed by Jack Dorsey’s Block, Gridless electrifies its machines with a mix of solar power and the stranded, wasted energy from a nearby geothermal site. It’s one of six mines run by the company in Kenya, Malawi and Zambia, powered by a mix of renewable inputs and working toward a broader mission of securing and decentralizing the bitcoin network.

Gridless runs Gridlesin Hell’s Gate operates on geothermal power.

MacKenzie Sigalos

“Most people think about bitcoin and the price of bitcoin and how they can save value in it or maybe spend it,” Gridless CEO Erik Hersman told CNBC during a visit to the Kenyan mine earlier this year. “That doesn’t happen without the bitcoin miners and us being globally distributed.”

Decentralization is a key feature of bitcoin, because it means the network isn’t controlled by any entity and can’t be shut down — even if a government disapproves.

Bitcoin and some other cryptocurrencies are created through a process known as proof-of-work, in which miners around the world run high-powered computers that collectively validate transactions and simultaneously create new tokens. The process requires heaps of electricity, leading miners to seek out the cheapest sources of power.

While there are more than a dozen publicly traded miners, thousands of smaller, private operations are also competing to process transactions and get paid in new bitcoin. That includes individual miners in countries from Venezuela to Lebanon, and can involve a single mining rig in a kitchen or several hundred thousand of them in an industrial-grade datacenter.

Gridless runs a geothermal-powered bitcoin mine in Hell’s Gate on the shore of Lake Naivasha.

MacKenzie Sigalos

Wherever the operation, bitcoin mining is a volatile business, because so much of the economics depends on the price of the cryptocurrency. Since losing 60% of its value in 2022, bitcoin has come roaring back, hitting a record above $73,000 in March, before pulling back a bit in recent weeks.

Much of the rally has been tied to the launch of spot bitcoin exchange-traded funds in the U.S., as well as optimism surrounding the so-called halving that took place late Friday. That event occurs every four years and is designed to cut the reward for bitcoin miners in half, reducing the pace at which new bitcoins enter the market. Prior halving events have been followed by big run-ups in the cryptocurrency.

“Bitcoin is effectively unbreakable at this point,” said Adam Sullivan, CEO of Core Scientific, a bitcoin miner based in Texas. “Bitcoin is at a point where it is more profitable to continue supporting the network…

Read More: Bitcoin miner Gridless, backed by Block, builds site at Kenya volcano

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