Paraguay to Become Top Bitcoin Mining Hub in Latam According to Insight Group – Paraguay, a country not particularly recognized for its crypto connections, is now considered as one of the most attractive destinations in Latin America for bitcoin miners. According to mining insight firm Hashrate Index, the country offers a number of advantages that might help it become one of the region’s largest bitcoin centres.
The first advantage that Paraguay has over other countries in the region, and what attracted miners after the Chinese miner migration, is an availability of clean, affordable hydroelectric power, which can be leveraged to develop big bitcoin mining operations. The majority of this power is generated by the Itaipu Dam, with Paraguayans consuming only around 10% of the power generated.
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While the majority of this energy is exported to neighboring countries, the group believes it can be used to power large mining operations in the future. According to Hashrate Index, there are now two distinct drawbacks to establishing a bitcoin mining operation in Paraguay. One is the summer climate, which can reach high temperatures and humidity, affecting the longevity of air-cooled mining rigs.
The other, and arguably most significant, factor is the government’s disapproval of Bitcoin mining operations. In the proclamation used to veto the cryptocurrency law authorized by the Paraguayan house last year, Paraguay’s president, Mario Abdo, criticized the industry. 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.
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