Bitcoin Zama Zamas: A New Breed of Illegal Mining
Illegal BTC and crypto mining in Africa could have serious ramifications for the energy supply and economic growth
While cryptocurrency adoption has grown exponentially throughout the African continent, concerns have developed around a new type of illegal Bitcoin mining that might pose a malicious threat to Bitcoin and cryptocurrency users in Africa.
Taken from the colloquial term used to describe the illegal gold mining activities that have fostered a dangerous criminal industry in several African countries, Bitcoin Zama Zamas pose a unique threat to crypto enthusiasts.
The new terrain of crypto mining
The process of crypto mining is essentially competitive. Crypto mining is conducted in order to verify and add new transactions to the blockchain. The winning miner receives a percentage of the currency’s value, as well as transaction fees.
Mining hardware can be purchased by anyone, and everyone can connect to the Internet. Today, machines with high-end GPUs or even standard PCs can be used to mine new cryptocurrencies that use a different consensus algorithm, such as the proof-of-work (PoW) approach.
This new mining terrain, which exists in a totally virtual space, has attracted numerous mining mavericks, and alongside these, a swathe of illegal operators says Louis Schoeman from SA Shares
Cryptocurrency has become a popular investment vehicle for both investors and criminals alike. Transactions using cryptocurrencies are inherently more difficult to monitor than those involving traditional fiat monies.
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In the mining division of the crypto economy, illegal mining farms have begun to flourish, creating a new set of problems for the countries in which these illicit operations take place.
The infrastructural toll of illegal crypto mining
Mining is the process of solving cryptographic algorithms in order to create and secure digital currency. ASICs and GPUs are used instead of hammers and chisels by crypto-miners to validate transactions as quickly as possible, and they earn cryptocurrency as a result.
However, in order to mine cryptocurrency, you need a lot of electricity, with the output of entire countries dwarfed by the energy use of BITCOIN . As an example, the Bitcoin network consumes around 137.9 terawatt-hours of electricity year.
As mining computers require a lot of computing power, it is profitable in nations where electricity is cheap, but in many African countries, these miners are making use of illegal electricity to power their operations, placing a huge toll on the country.
Illegal crypto-miners are putting a strain on these countries’ energy supplies, and using cryptocurrency farming illegally might cause network failures and financial losses across the economy. Illegal electricity usage to mine crypto is evident in South Africa.
There have even been cases of illegal crypto mining operations being run within some corporate buildings, draining the company’s network supply and severely hampering their business operations.
As such, if these activities become more prolific they could have serious ramifications for businesses throughout Africa.
Final Thoughts
As many African countries begin to fast track their economic growth, their infrastructural reliance has become more critical than ever for business development and for attracting foreign investment.
Cryptocurrency has been broadly adopted across African countries by business owners and individuals alike as a means of avoiding inflationary pressure from local fiat currencies, and bypassing the red tape of financial institutions.
Yet, while cryptocurrency use has presented many advantages for Africans, illegal crypto mining operations pose a serious threat to the power grids, and therefore to the economic resilience of these countries going forward.
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