Can Paraguay Become a Bitcoin Mining Hub After China’s Raid?
Bitcoin miners were coped a blow in May when tThe State Council of China’s Financial Stability and Development Committee declared further financial risk control measures.
The statement is the most recent in China’s long-standing grappling with the crypto market. But this time around, given the Chinese Communist Party’s push because of their digital yuan, it feels like commercial actions, miners in particular, are feeling the need and want to go elsewhere.
The press release specifically addresses preventing Bitcoin mining and trading within the boundaries of financial risk control.
“PPromote reform of small and medium-sized financial institutions, with an emphasis on reducing credit risk, strengthening supervision over the financial activities of platform companies, preventing bitcoin mining and trading, and being determined to keep personal risk from being transferred to the prevent social area. “
Could we see a change in the geographical location of bitcoin mining infrastructure as Latin American countries begin using bitcoin?
The hash rate in Bitcoin mining has decreased
According to Reuters, China’s crypto penetration has reached Sichuan state, where governments have ordered the shutdown of bitcoin mining operations in the region.
The Sichuan Provincial Development and Reform Commission and the Sichuan Power Administration issued a joint notice on Friday, which Reuters saw, calling for the closure of 26 suspected crypto mining jobs by the end of March. Sunday”.
Electricity companies in the area have reportedly been ordered to stop supplying electricity to miners.
The effect on Bitcoin’s hash rate decreased sharply at the time of the announcement. In mid-April it reached an all-time high of around 180 million TH / s. But since then, the latest data shows that the hash rate dropped to around 125 million TH / s in November 2020.
The hash rate is a measure of the computing power of the Bitcoin network. The higher the hash rate, the more secure the network is. Some also take the hash rate as a measure of the health of the network.
Will Paraguay fill the void?
To attract miners, the United States has presented itself through Texas and Florida (Miami) as viable places for business to be located.
But, given that a number of Latin American countries are joining the Bitcoin revolution, could we favor Chinese miners in countries like Paraguay for lower costs and abundant renewable energy?
In the past few weeks, several Latin American countries, including Paraguay, have signaled their intention to follow El Salvador in officially recognizing Bitcoin.
Paraguay is home to the Itaipu Hydroelectric Dam (IHD), which is on the border with Brazil. With a capacity of 14 gigawatts, the IHD is the second largest dam in the world. It supplies 90% of Paraguay’s electricity and 15% of Brazil’s needs.
Although the alternate country Paraguay Carlitos Rejala With IHD keeping its specific plans for Bitcoin (and PayPal) private for now, given IHD’s importance to the country, it almost goes without saying that it will play a role in Paraguay’s Bitcoin revolution.
Rejala will submit the Bitcoin law to Congress for discussion in July.