Since its inception, Bitcoin has been known to change the lives of many individuals worldwide. However, with its growing popularity, the cryptocurrency is now improving governments and countries in general. One beneficiary is Paraguay. The country’s economic and debt crisis is expected to end as a result of an increase in Paraguay bitcoin mining activities.
Many of the hydroelectric powered-towns in this South American’s struggling economy have long been associated as centers for ammunition, smuggling, and drug cartel rackets. However, the emergence of Paraguay Bitcoin mining endeavors has transformed these communities into miners’ homes. The homes are expertly connected in excellent network circuitry to mine various cryptocurrencies for the owners.
In Ciudad Del Este city, empty spaces and warehouses near electricity centers are continually getting converted into Ethereum and Bitcoin mining data centers. Most of the residents in the area are unaware of the activities of the new industry that seem to have sprouted almost overnight. Nonetheless, the knowledgeable insiders consider this industry as a new economy.
The Paraguay Bitcoin mining industry is offering new opportunities for value creation resulting from meaningful employment. Environmentalists are not thrilled by this new industry. The city’s annual average temperature is currently around 22-degree centigrade. However, the introduction of mining data centers will eventually lead to a significant increase in the subtropical heat that the city will encounter.
The popularity of cryptocurrency mining is increasing exponentially with Ciudad Del Este city hosting around 20,000 such mining units. Experts believe that this number will proliferate since the mining activities do not seem like slowing down any time soon. The boom’s rationale is the same as that experienced in Mongolia and Iceland rising as the epicenters for Bitcoin mining.
Supportive government regulations, cheap labor, cold weather, and low taxes are the main reasons why these new ‘Silicon Valleys’ are thriving in these strategic areas. However, the reasons for Ciudad Del Este are slightly different. The nearby gigantic Itaipu dam forms a noteworthy factor for the development of many mining hubs.
The dam generates plentiful hydro-electricity. It is entirely powered by the perennial Parana river that fast-flows on the northern side of the city. The inexhaustible energy supply is a significant benefit to the energy-intensive crypto mining setups that need functional cooling systems for the powerful computing hardware.
Economists believe that the nation’s economy can be salvaged by the Paraguay Bitcoin mining industry that can lift a quarter of the country’s population out of poverty. According to World Bank data, the state has the highest land ownership inequality levels worldwide. It also has among the worst unemployment rates worldwide.
The many mining centers in the city have resulted in the development of a high number of related businesses. Local owners are reporting an increase in their business revenue due to an increased number of customers. For example, most air-conditioning equipment businesses reported an upsurge in the number of new customers when Bitcoin mining was taking off in 2017.
Some entrepreneurs even ventured into producing Do-It-Yourself (DIY) cooling systems by improvising from damp cardboard and industrial fans to cut costs. A year later, many of these business people are renting out thousands of custom-built mining rigs that are attached with cooling systems. These new ventures associated with bitcoin mining have created additional job opportunities, in turn, reducing the unemployment rate in Ciudad Del Este city.
The locals believe that Paraguay can become the epicenter of bitcoin mining since it is among the few places with abundant energy to support these activities. Paraguay has an ample electricity supply. However, due to the few factories in the country and a defective national grid, most power is exported to Brazil at below-market rates.
On the flip side, the five cents per KiloWatt/Hour prices for domestic power consumption enable Brazilian investors and companies to penetrate the region setting up businesses. This rapid development on the Brazilian side is prompting a repercussion from the unemployed local workers actively seeking employment.
The Ciudad Del Este residents believe that China’s 150,000 mining units can be relocated to fit on the Paraguayan energy grid. They also think that cryptocurrencies are also a ‘way out’ for the country’s dwindling economic.
The locals believe that in 10 years the bitcoin mining industry would generate adequate resources to pay the country’s external debt. Therefore, most think that it would be a prudent idea to invest in Paraguay’s energy in cryptocurrency instead of selling it to Brazil.
The post Bitcoin Mining is Saving Paraguay’s Troubled Economy appeared first on CoinDiligent.