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Latin American Country Paraguay Could Become A Hub for Bitcoin Mining

source-logo  worldcoinindex.com 23 February 2023 07:10, UTC

With El Salvador taking the lead by making Bitcoin a legal tender, other Latin American countries are making a closer move to adopting BTC.

One of the smallest Latin American countries Paraguay is now looking to attract Bitcoin miners from across the globe. Paraguay has a wide range of benefits which could help it become a hub for crypto mining activities in the region.

The first advantage with Paraguay is its geographic location. After the Chinese exodus, Paraguay turned an attractive location for miners due to the abundance of clean and cheap hydroelectric power, which is quite essential for developing large Bitcoin mining operations.

A large majority of the power comes from the Itaipu Dam. However, Paraguayans are using only 10% of the total power produced here. A large part of this energy gets exported to the neighboring countries. However, Paraguay can consider using this energy for the country’s own needs while catering to the crypto mining activities.

While there are a few factors in favor of Paraguay, there are some disadvantages as well! Hashrate Index recently stated that there are two major disadvantages of choosing Paraguay as a destination for establishing a Bitcoin mining operation.

The first disadvantage is the country’s summer that sees high temperatures and high humidity which could ultimately affect the longevity of the air-cooled mining rigs.

Similarly, the other major disadvantage is more significant which is the unfavorable opinion that the Paraguayan government holds towards Bitcoin mining activities. Mario Abdo, the president of Paraguay has criticized the industry in the decree used to veto the cryptocurrency law approved by the Paraguayan congress last year.

Here, President Abdo noted that crypto 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 regarding the future of crypto mining activity in the country. Abdo said that if Bitcoin mining activity continues to grow in Paraguay, they might need turn power deficit and import power in that case.

As a result the national power company of Paraguay penalized the crypto mining industry by levying a power fee hike of over 50% in January last month. This has impacted several crypto miners operating in Paraguay.