This National Park in Congo survived thanks to Bitcoin mining

Congo-Kinshasa’s Virunga National Park, home to rare mountain gorillas, has been plagued by misfortune and conflict. An article from MIT TechnologyReview magazine describes the extraordinary story of how Bitcoin mining proved to be the missing piece for the park in its fight against large-scale deforestation.

Virunga National Park, the oldest national park in Africa, is located in the east of the African country of Congo-Kinshasa. It is on the UNESCO World Heritage List and is known for its enormous biodiversity. In particular, the endangered mountain gorillas that inhabit it, much of the remaining global wild population of which resides in the park.

In addition, Virunga is notorious for its continuously turbulent conditions. The region is underdeveloped and has been plagued for years by corruption, poaching, deforestation and extremely violent rebel conflicts, which also affect the park and its employees.

According to park ranger Cherubin Nolayambaje, his job is “the most dangerous job in the world.” Since 1996, more than 200 park rangers have been killed – about one per month. Netflix even has a documentary about it. The park is led by Emmanuel de Merode, who guided the park through several conflicts and narrowly survived an assassination attempt.

The organization of the national park is of course committed to nature conservation and maintenance of the park, but the region and circumstances make it complex. About 5 million people live around Virunga and about 80,000 in the park itself.

There are hardly any electricity and other facilities. Most therefore cut down trees to make charcoal for cooking. Many hunt or fish in the park. All forbidden, but necessary for the local population to survive and for the local warriors to pay off.

Between 2001 and 2020, Virunga lost nearly 10% of its forest cover and an estimated $170 million worth of ivory and timber is extracted from the national park each year. The park was looking for a structural solution – one with an eye for the local community.

Hydroelectric power station

The new Luviro hydroelectric power plant was therefore built in one of the rivers. As a result, local residents can be provided with clean electricity, so that they no longer need charcoal.

Considering the location and the inhospitable area, this is a huge and costly job. Moreover, it is a complex puzzle in order not to turn it into a loss-making operation. There are relatively few potential customers in the region and the infrastructure to transport the power to customers was also lacking.

The plan was to build the power station first and then the surrounding infrastructure. The idea was that the power grid and local demand would gradually grow. After construction, the plant would initially suffer from power surpluses, but the resulting low electricity price would encourage local activity, just as happened before at other hydroelectric power plants elsewhere in the park.

It didn’t exactly go according to plan. The Congolese government only subsidizes 1% of the costs of the national park, so Virunga is on its own for the other 99%. The hydroelectric power plant would also contribute to this. In 2019, however, the project was not yet finished, but the money was running out.

“We built the power plant and thought we could gradually build the network afterwards”says de Merode. “Then we had to shut down tourism in 2018 because of the kidnappings [door rebellen]. In 2019 we had to shut down tourism because of Ebola. And in 2020 – the rest is history, with COVID. For four years, our income from tourism – it was once 40% – completely collapsed.”

Bitcoin

They came up with an unconventional solution: Bitcoin mining. This offers a way to convert electricity directly into money. It is location-independent and can therefore be done just as well in the Congo jungle as anywhere else in the world. All you need is mining equipment, power and an internet connection. The latter is easily solved with a satellite connection.

It’s unexpected, but we had to come up with a solution. Otherwise we would have gone bankrupt as a national park

Emmanuel de Merode

They found a partner in the French investor Sébastien Gouspillou. His company Big Block Green Services specializes in Bitcoin mining based on renewable energy. With his help, Virunga National Park purchased second-hand ASICs that were placed in containers next to the hydroelectric power plant. The park started mining in September 2020.

“I wanted to help,” says Gouspillou. “We have done mining in the past by buying energy, which was not efficient. The money might then go to oligarch in Kazakhstan. In Virunga, we see that the park is saved by it.”

It turned out to be a great success, all the more so because of the rising share price. “We finally got lucky for once”, says de Merode. Today there are a total of ten containers, each with 250 to 500 ASIC miners. Nine new employees have been hired for maintenance – new and well-paid jobs.

Three containers belong to the national park, with the mining proceeds being sold to pay salaries and other costs of the park. The other seven containers belong to Gouspillou – he pays Virunga for the electricity and the mining proceeds are his.

De Merode estimates that it made the park $500,000 last year, while other revenues were lost due to the pandemic.

Durable

Bitcoin mining and the environment are not necessarily opposites, but sometimes go hand in hand. In Virunga, it concerns 100% sustainable electricity and the initiative contributes to the prevention of deforestation and the reduction of CO2 emissions, because less charcoal is burned.

The power could in theory also be used for something else, but not in practice. Firstly, the infrastructure to dispose of it is lacking and secondly, there are few – if any – other profitable applications you can think of that you can perform in the middle of the jungle.

Even as the infrastructure expands and the surrounding region is connected, the miners will continue to be an important energy consumer of the park. The hydroelectric power station will probably produce much more power than the local demand for a long time. The decrease in miners allows the hydropower plant to run at full capacity 24/7, turning off all the power it can generate, without ever having to scale back as demand decreases. The plant is therefore more profitable.

Once the local demand for electricity from the population grows, the price of electricity will also rise through market forces. At a certain point, the electricity price will become too high for Gouspillou to continue mining profitably. He will then have to look for a new location for his miners, where the electricity is still cheap. The Virunga National Park may also stop mining if people locally pay more for the electricity than the mining yields.

Now that the bitcoin price has fallen again, the profitability of mining is also lower. The income for the national park is therefore much lower than a year ago. Nevertheless, it remains ‘an extremely good investment for the park’, says de Merode. “We don’t speculate on the value; we generate it. If you buy bitcoin and the price falls, you lose money. But we make bitcoin out of energy surpluses and turn something into money that would otherwise have no value. That’s a big difference.”

Driver of sustainable energy

Gouspillou sees the project in Virunga as an example of how Bitcoin mining can boost the development of renewable energy sources.
“People say it’s bad for the environment, but here it’s clean energy. It’s a formula that can be copied”. Wherever renewable energy can be generated in the world, Bitcoin mining can ensure that it is profitable.

He’s not the only one who thinks this way. Last year, for example, Cathie Wood’s Ark Invest and Square, Twitter founder Jack Dorsey’s payment company, argued that Bitcoin is “key to a future of abundant and clean energy.”

There are also more and more practical examples. For example, small-scale hydroelectric power plants are being built in Kenya, thanks to Bitcoin mining. In America, the Navajo are switching to solar panels instead of coal because it is profitable thanks to mining. El Salvador opened its doors wide to miners to use the clean energy of a new geothermal plant and is now working on expansion as part of Bitcoin City.

In Texas, Bitcoin miners work with local authorities to balance the power grid, as they often experience power surpluses or shortages there due to the many solar panels and wind turbines. Tesla, Block and Blockstream are also working on a proof of concept mining center there, which should prove that mining and sustainable energy complement each other.

climate

Mining is also used in other ways to benefit the environment and climate. In Spain and Italy, livestock farmers capture the methane emissions from manure, preventing it from being released into the air, so that the generated energy can be used to mine bitcoins. There are also projects that capture greenhouse gases from waste heaps and use them for mining.

In the Netherlands, growers are moving away from environmentally unfriendly gas to heat their greenhouses, because electricity-based mining equipment also heats, but at the same time helps to cover energy costs. The same thing happens with wood drying in Norway and with whiskey in the US. In Vancouver they heat houses with it.

Perhaps most promising are the various initiatives to capture methane emissions from oil extraction, to generate power on site for Bitcoin mining. The gas is excess and unwanted and because there is no infrastructure to dispose of it, it is normally burned or even released directly into the atmosphere. Together, that would account for 6% of total global greenhouse gas emissions. However, Bitcoin mining makes it profitable to limit emissions.

Large oil companies such as ExxonMobil, ConocoPhilips, GazProm, Equinor and oil producers in Oman are now experimenting with it and in several cases the pilots have been expanded due to success.


Want to read more about Bitcoin mining in Virunga National Park? Then also read the extensive article by MIT TechnologyReview

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