Argentina, the ailing South American country, is experiencing a cryptocurrency mining resurgence due to artificially low electricity rates created by subsidies from the national government. This fact, coupled with exchange controls and the possibility of selling the obtained asset at a higher exchange rate than the official one, is enticing more and more individuals to enter the mining business.
Argentina is experiencing a mining boom
Argentina is experiencing a mining boom due to highly subsidized electricity rates and exchange controls, which enable miners to sell their mined bitcoins at a higher exchange rate than the official set up by the government.
The growing interest in mining cryptocurrencies is also related to the fact that Argentina is subject to capital controls that prevent citizens from exchanging more than $200 for their local fiat currency, the peso; As a result, there has also been an increase in the demand for other convertible currency to protect their purchasing power from inflation.
According to bloomberg, the subsidies are so high that despite the recent drop in prices, Argentine miners are still in the green. One miner, Nicolas Bourbon, declared:
Even after the correction in the price of bitcoin, the cost of electricity is still a fraction of the total revenue for anyone mining from their home.
This fact has also aroused the interest of foreign mining companies in entering Argentina to take advantage of these subsidies. Canada-based mining conglomerate Bitfarms, Safe Mine at a much lower rate using electricity from a local plant than most comparable options. Bitfarms President Geoffrey Morphy said:
We were looking for places that may have overbuilt their power generation systems. Economic activity in Argentina is reduced, and electricity is not being used to its fullest. So it was a win-win situation.
stability at stake
Argentina is the newest country turn To crypto and mining as a way to achieve greater financial and economic freedom for its citizens in the face of economic difficulties, as Iran and Venezuela did before. But it may well affect the integrity of the power grid depending on the impact of mining boom activities.
This is what has happened in Iran, which had to act only recently. To put restrictions on As of September 22nd, Bitcoin mining, the power grid is experiencing frequent blackouts. Miners in Iran need to be registered to operate legally. However, it is estimated that over 85% of the miners remain unlicensed.
What do you think about the recent cryptocurrency mining boom in Argentina? Tell us in the comments section below.
Image credit: Shutterstock, Pixabay, WikiCommons
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell any products, services, or companies, or a recommendation or endorsement of any products, services or companies. bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the Company nor the author is responsible, directly or indirectly, for any damage or loss alleged to be caused or in connection with the use or reliance on any content, goods or services mentioned in this article.