Mining mecca: the unstable future of mining in Paraguay
Flaunting one of the world’s largest hydroelectric facilities in the world, Itaipu Dam, Paraguay has begun supporting cryptocurrency mining through its cheap and abundant electricity. Cryptocurrency businesses across the globe are flocking to the country in order to take advantage of rates ranging between $0.03 to $0.05 per kilowatt-hour, about one-third less than prices they would pay in Argentina.
The dam currently powers about 20,000 cryptocurrency mining rigs throughout Ciudad del Este, and given the staggering number, many development experts believe that prices should be raised and profits allocated to help with social development in Paraguay, such as welfare services, employment, healthcare, education and transport infrastructure.
Currently, Paraguay uses only 13 percent of its energy, with much of the surplus going to neighboring Brazil. Tech entrepreneur Gregorio Bareiro believes that the government should be diverting more of its energy into mining saying,
“Paraguay today is the only place where there’s abundant energy. We can become the center of global bitcoin mining.”
Given the increasing popularity of cryptocurrencies, Bareiro may be right that Paraguay’s investment of energy into bitcoin mining has the potential of eventually being much more profitable than exporting it to Brazil. By centering itself in the mining market, Paraguay has the chance to drastically improve its social development as cryptocurrencies continue to grow.