The Block: Congo national park’s bitcoin mining bet saved it from going bust: MIT Tech Review

Nestled on the eastern edge of the Congo basin, the Virunga National Park is the second-largest tropical rainforest in the world, home to half of Africa’s terrestrial animals and a third of the last mountain gorillas.

Plagued by a dramatic fall in tourism following kidnappings, Ebola and then COVID-19, work to preserve its conservation efforts turned to an unlikely bedfellow — bitcoin mining.

As park director Emmanuel de Merode explained in a report from MIT Technology Review, park revenue fell 40% following the collapse of tourism. With the Congolese government contributing only around 1% of the budget it needed, the park was in desperate need of money.

“It’s not something we expected, but we had to work out a solution. Otherwise, we would have gone bust as a national park,” de Merode said.

That’s where bitcoin mining came in. De Merode and his park colleagues decided to leverage Virunga’s river-run hydro plant to power $200,000 worth of bitcoin mining rigs. The plant was already built, with plans to increase the energy network gradually, but all that had come to a halt.

By embarking on a bitcoin mining project, de Merode’s team hoped to earn some profits to compensate for the shortfall in revenue while providing a viable way to utilize its hydropower resources to benefit the park and its local population.

‘Bitcoin City’

The mining rigs set up camp in Luviro, a hamlet just outside Virunga, with the help of crypto investor Sébastien Gouspillou. His company, Big Block Green Services, also advised El Salvador on its Bitcoin City and another hydro-powered bitcoin mining project in the Central African Republic.

Virunga started mining in September 2020, becoming the world’s first known national park-operated bitcoin mine, just as the bitcoin bull market was taking off. “We were lucky — for once,” de Merode said.

Fast-forward to today, and 10 chrome green containers, each 40 feet long and holding 250 to 500 machines, are directly powered by the hydro plant’s four-meter turbines. They grind the days away in pursuit of bitcoin rewards while helping secure over $370 billion of network value.

Virunga’s gorillas are an endangered species, but the park also cashed in on rare apes of a digital kind, teaming up with NFT project CyberKongz to auction off gorilla NFTs at Christie’s. Some of the $1.2 million raised paid for two of the three containers owned by Virunga.

The remaining seven containers are owned by Gouspillou, paying Virunga for the power used, but retaining the mining rewards for his investors.

Profitable and green

Virunga’s bitcoin mining proceeds are already helping the park’s conservation efforts, and funding jobs and infrastructure projects, including roads and water pumping stations. 

That’s proved to be popular for many working in and around the park. Still, not everyone is convinced of Bitcoin’s conservation credentials. In fact, its detractors often criticize it for the opposite — mainly due to the amount of energy required to run mining operations, with the electricity usually generated from fossil fuels. The director-general of the European Central Bank even called it an “unprecedented polluter.”

Despite the criticism, for Gouspillou, it’s about the model deployed rather than bitcoin mining itself. “People say it’s bad for the environment, but here it’s clean energy. It’s a formula that could be replicated,” he said.

Michael Saylor, the co-founder of the business intelligence firm MicroStrategy known for investments in and advocacy of bitcoin, agreed. It was “the ideal high-tech industry to put in a nation that has plenty of clean energy but isn’t able to export a product or produce a service with that energy,” he said. 

Bear Market

Despite the market turmoil that has rocked the industry over the past year with falling prices, scandal and bankruptcies, Virunga has largely been able to weather the storm.

“Even if bitcoin dropped to 1% of its value, the 10 containers would remain profitable,” de Merode said, estimating that bitcoin mining generated around $500,000 for the national park last year. 

It’s “an incredibly good investment for the park,” he added. “We’re not speculating on its value; we’re generating it. We’re making bitcoin out of surplus energy and monetizing something that otherwise has no value. That’s a big difference.” 

© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.