According to Mining Insight Group’s Hashrate Index, Paraguay, one of the smallest countries in Latam, has what it takes to become the next bitcoin mining hub in the region It has. The company notes that there are many factors in Paraguay’s favor, including an abundance of clean hydroelectric power. However, the stance the government is taking on cryptocurrency mining could slow this growth process.
According to the Insight Group, Paraguay has all the elements
to become a bitcoin mining powerhouse in Latam.
Paraguay is not particularly known for its crypto-related activities, but it is currently considered one of the most attractive destinations in Latam for bitcoin miners. According to Mining Insight CompanyHash Rate Index
, the country has a series of advantages that help it become one of the largest cryptocurrency hubs in the region.
The first advantage Paraguay has over other countries in the region, which is also why the country became an attractive location for miners after the exodus of Chinese miners, is the abundance of clean, cheap hydroelectric power that can be used to build large-scale bitcoin mining operations This is the abundance of clean, cheap hydroelectric power that can be used to build large-scale bitcoin mining operations. Most of this power comes from the Itaipu Dam, and it is estimated that Paraguayans consume only about 10% of the electricity generated.
Most of this energy is exported to neighboring countries, but according to the group, it could power large mining operations in the future.
Some Disadvantages
According to the Hashrate Index, there are currently two types of disadvantages to choosing Paraguay as a destination for establishing a bitcoin mining operation: one is the summer climate, which can be hot and humid, and the life of air-cooled mining rigs This can affect the life of air-cooled mining rigs.
The other, perhaps the most important one, has to do with the unfavorable opinions that governments have about bitcoin mining activities. Paraguayan President Mario Abdo has criticized the industry in a decree used to reject the cryptocurrency law approved by the Paraguayan Congress last year.
Abdo said cryptocurrency mining is an activity “characterized by massive consumption of electrical energy, intensive use of capital and little use of labor.” He also warned about the future of the activity in the country, noting that if the industry continues to grow in Paraguay, it may have to import electricity.
With this vision, the state electricity company has penalized the industry, applying an increase in electricity prices of more than 50% in January, affecting mining companies already established in the country, reducing their profit margins and making them unable to offer hosting services for third parties.
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