What will it take to mine bitcoin in Nigeria?
In many ways, bitcoin is the digital but just-as-shiny version of gold. They are both investment assets, they exist in finite quantities, and they both require mining. Bitcoin mining doesn't require manual labour, but if you asked, miners would say that bitcoin mining is more complex than gold mining.
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Trading and mining are the two ways of acquiring bitcoin. Nigeria had the third-largest bitcoin trading transaction volumes last year, but the chances of finding miners in Nigeria are slim.
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The bitcoin mining protocol, called proof of work, requires powerful computers known as mining rigs which need stable electricity to run. Mining rigs are also expensive and generate a lot of heat; so, air conditioners are necessary for our hot climate.
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An alternative mining protocol called proof of stake doesn't require such powerful mining rigs or electricity usage. If the proof of stake mining protocol is adopted, bitcoin mining will be more accessible to Nigerians.
There are two ways of obtaining bitcoin: mining and trading. Mining is the process of creating a new bitcoin and also how the bitcoin ledger is maintained. Trading is exchanging one currency for another, but mining is a lot more complex. These definitions are the CliffsNotes version, and we'll go deeper as we go along.
What's particularly interesting is that while three African countries (led by Nigeria) made the list of top 9 countries with the highest bitcoin trading volumes in 2020, over 90% of bitcoin mining happens in 9 countries worldwide, and none of them is in Africa.
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