The availability of subsidized commercial electricity is making Argentina an increasingly fertile ground for Bitcoin mining. Miners make significant profits from the exploitation of this cryptocurrency. The $ 200 limit on currency conversions and hyperinflation is really pushing locals to look for other alternatives to Bitcoin mining. Thus, the famous cryptocurrency has become the main means of increasing income in Argentina.
Energy subsidies benefit bitcoin mining
Huge inflation and cheap subsidized electricity made cryptocurrency mining in Argentina very attractive… In accordance with Bloomberg, economic uncertainty and electricity subsidies have prompted many Argentines to turn to Bitcoin mining.
For Nicolas Bourbon, an experienced miner, the cost of electricity today for people mining from their homes is only part of the total income that was received… This is due to the policy of the Argentine government, which allows the population take advantage of large electricity subsidies… So only 2 to 3% of monthly income the Argentinean is allocated to the electricity bill.
Meanwhile, in countries like Colombia, Brazil or Chile, electricity costs twice as much. On the other hand, Argentines do their best to fight inflation desperately looking for alternative assets to hedge. It should be noted that inflation increases by 50% every year in the country.
Moreover, by requiring foreigners not to be able to exchange their pesos in excess of 200 dollars, the government only aggravates the situation. This situation only makesincrease the depreciation of the Argentine peso… Bourbon explains that the electricity subsidy allows miners to have very high incomes because cryptocurrency generated by mining is directly traded at a parallel exchange rate…
Large companies are interested in Argentina
The explosive growth in mining in Argentina did not fail to attract attention of large international mining companies… This is the case Bitfarms one of the world leaders in the mining industry. The company plans consume up to 210 megawatts of electricity using a power plant local electricity in Argentina…
Jeffrey morphy chairman of Bitfarms to tell Bloomberg that his company is looking for places with rebuilt their power generation systems… He believes that electricity in Argentina is not fully used, while economic activity in the country is declining. For him, everyone could emerge victorious from this situation both mining companies and the local economy.
The country offers attractive rate of USD 0.22 per kWhwhich is more profitable than average $ 0.06 provided in the sector. However, these grants will not cover all of the company’s activities. Despite the fact that the subsidies provided by the Argentine government described as “funny”, this does not prevent minors from using it.
While local politicians disagree over electricity subsidies, bitcoin mining in Argentina will remain quite a lucrative business in the country for a long time to come. Argentina may soon become like Iran, which has decided to invest its surplus electricity production in bitcoin mining to regulate its market.
DENIAL OF RESPONSIBILITY
The comments and opinions expressed in this article are those of the author only and should not be construed as investment advice. Do your own research before making any investment decisions.