Paraguay, one of the smallest countries in Latin America, has all the conditions necessary to become the next bitcoin mining hub in the region, according to the mining analysis group’s Hashrate Index. The company notes that there are many factors in Paraguay’s favor, including an abundance of clean hydroelectric power plants. However, the government’s stance on cryptocurrency mining may slow down this growth process.
According to the Insight Group, Paraguay has all the prerequisites to become the center of bitcoin mining in Latin America.
Paraguay, a country not particularly known for its cryptocurrency connections, is currently considered one of the most attractive destinations in Latin America for bitcoin miners. According to Mining Insight Hash Index, the country presents a number of advantages that could help it become one of the largest cryptocurrency hubs in the region.
The first advantage Paraguay has over other countries in the region that has made it an attractive destination for miners after the exodus of Chinese miners is the abundance of clean and cheap hydroelectric power that can be used to set up large bitcoin mining operations. Most of this energy comes from the Itaipu Dam, with Paraguayans reportedly consuming only about 10% of the electricity generated.
While most of this energy is exported to neighboring countries, the group believes it could be used to power large mining operations in the future.
Some disadvantages
The hashrate index says that currently choosing Paraguay as a destination for setting up a bitcoin mining operation has two different disadvantages. One of them is the summer climate, which can reach high temperatures and high humidity, which affects the durability of air-cooled mining rigs.
The other, and perhaps the most important, has to do with the government’s unfavorable view of bitcoin mining. Paraguayan President Mario Abdo criticized the industry in a decree that was used to veto a cryptocurrency law approved by the Paraguayan congress last year.
Abdo stated that cryptocurrency mining is an activity “characterized by high electricity consumption, heavy use of capital and little use of labor.” He also warned about the future of activities in the country and the possibility of importing electricity if the industry in Paraguay continues to grow.
This vision has led the national energy company to punish the industry by enforcing more than 50% electricity price hikes in January, affecting existing miners in the country, reducing their profits and making them unable to offer hosting services to third parties.
What do you think of Paraguay and its potential future as a crypto mining hub in Latin America? Tell us in the comments section below.
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