Paraguay is blessed abundantly with natural resources and energy is one resource which is plentiful, thanks to the mighty Itaipu dam. A debate now rages on the utility of the energy generated by this dam – to invest more in cryptocurrency or bitcoin mining or for economic strategies to uplift rampant poverty in this South-American country.
Cities in the developing economy of Paraguay are suddenly adopting bitcoin and Ethereum mining thanks to their proximity to the mighty Itipau’s hydel power generation capability.
The country has roughly 20,000 such units and continues to mushroom at the unlikeliest of the places, quickly replacing the drug smuggling, cartels and other illegal activities which are local to the area, thanks to drug lords and warring factions.
Paraguay sitting on bitcoin mining power
Considering the employment and productivity opportunities crypto-mining is offering its people, Itaipu’s incredible power generating capacity is highly appreciated.
However, the infrastructure – namely computers and cooling systems which are by default necessary for mining bitcoin is a disadvantage.
The other side of the bitcoin mining argument is that the government and its administrators should seriously pursue a populist policy and work towards the liberation of its people from poverty.
The divide between the rich and the power in Paraguay is very lop-sided, and according to reports issued by the World Bank, the country has one of the highest levels of inequality in terms of land ownership.
According to a tech entrepreneur Barreiro, who is offering indigenous cooling systems for mining infrastructure,
“Paraguay today is the only place where there’s abundant energy. We can become the center of global bitcoin mining.”
Since Itaipu dam output far exceeds the country’s consumption needs, Paraguay is often found selling their share of the power generated with co-sharer Brazil. However, the prices at which this transaction is far below the standard market prices, thus pushing Paraguay into a loss-making venture.
The power in domestic markets is priced $0.5 per kilowatt hour.
This surfeit of power availability has also resulted in attracting a huge number of startup and other industries into Paraguay.
For entrepreneurs like Barreiro, the number of units being started in Paraguay is very less and limited. He recommends that the government should seriously explore cutting power prices further so as to attract the China-based factories to Paraguay. Nearly 150,000 units can thus be attracted the cooling –equipment manufacturer.
Further, industrialists should be encouraged to develop cryptocurrency-backed units, even as the debate languishes among politicians and other stakeholders who would rather explore mainstream options. Besides, their current focus is only sharing the financial dividends available from the dam’s production. In 2023 they want to gain more from Itaipu’s blessings.
The debate also considers the outcome suggested by researchers who recommend the use of energy produced by the dam to build local and native production/manufacturing sector and thereby provide jobs for nearly 2m. This would also have indirect benefits such as quadrupling GDP of Paraguay.