Paraguay to Become Top Bitcoin Mining Hub in Latam According to Insight Group
Paraguay, one of the smallest countries in Latam, has the conditions needed to become the next Bitcoin mining hub in the region, according to mining insight group Hashrate Index. The company notes there are many elements in favor of Paraguay, including the abundance of clean hydroelectric power sources. However, the stance that the government has taken toward cryptocurrency mining could slow this growth process.
Paraguay Has All the Elements to Become a Bitcoin Mining Power in Latam, According to Insight Group
Paraguay, a country not especially known for its crypto affiliations, is now being considered one of the most attractive destinations in Latam for bitcoin miners. According to mining insight company Hashrate Index, the country presents a series of benefits that could help it become one of the biggest cryptocurrency hubs in the region.
The first advantage that Paraguay has over other countries in the area, and what made it an attractive location for miners after the Chinese miner exodus, is the abundance of clean, cheap hydroelectric power, that can be used to build large bitcoin mining operations. Most of this power comes from the Itaipu Dam, with Paraguayans reportedly consuming only about 10% of the power produced.
While most of this energy gets exported to neighboring countries, it can be sourced to power big mining operations in the future, according to the group.
Hashrate Index says there are currently two different disadvantages of choosing Paraguay as a destination for establishing a bitcoin mining operation. One is the climate in the summer, which can reach high temperatures and high humidity, affecting the longevity of air-cooled mining rigs.
The other, and perhaps the most significant one, has to do with the unfavorable opinion that the government has of Bitcoin mining activity. The president of Paraguay, Mario Abdo, criticized the industry in the decree used to veto the cryptocurrency law approved by the Paraguayan congress last year.
Abdo stated that cryptocurrency mining was an activity “characterized by its high consumption of electrical energy, with intensive use of capital and little use of labor.” He also warned about the future of the activity in the country, and the possibility of having to import power if the industry keeps growing in Paraguay.
This vision has led the national power company to penalize the industry, applying a power fee hike of over 50% in January, which affects already established miners in the country, lowering their earning margins and making them unable to offer hosting services for third parties.