Bloomberg reported yesterday Argentinian crypto miners are powering enormous returns thanks to a heavily regulated energy sector in which consumers pay half as much as in other large Latin American countries.
Nor is it just large mining farms that are reaping the rewards, with power cheap enough for from-home mining to be feasible.
The mining boom comes as interest in Bitcoin is spiking in Argentina, where extremely high inflation and a harsh recession and strict limits on how much foreign currency may buy is forcing many people to turn from rapidly devaluing cash to digital currencies for their day-to-day needs.
In May, local news site Bae Negocios reported that an estimated one million people bought virtual assets since the beginning of the year. That led the country’s tax authorities to order cryptocurrency exchanges to begin reporting transactions.
“Even after Bitcoin’s price correction, the cost of electricity for anyone mining from their house is still a fraction of the total revenue generated,” Nicolas Bourbon, an experienced miner, told Bloomberg. “The crypto that miners generate is typically sold at the parallel exchange rate, but the energy is paid for at a subsidized rate. At the moment, revenues are very high.”
Argentinian crypto fans are not only turning to Bitcoin. Daniel Vogel, CEO of Mexican exchange Bitso told CoinDesk TV last month that the company is “seeing a big demand for different stablecoins on our platform” from across Latin America.
The exchange, which operates in Argentina, has experienced a spike in demand for U.S. dollar-denominated stablecoins such as tether and USD Coin.
Miners Take Notice
Mining firms have been taking notice of Argentina’s electricity prices for months, with Canada-based crypto mining giant Bitfarms announcing plans for a 60-megawatt Argentinian facility in October.
In a release, the company said its contract guaranteed it would pay a little more than two cents — $0.022 per KWh — for its electricity for the first half of its eight-year contract.
Bitfarms said the contract entitled it to expand to 210 MW, which would support 55,000 new-generation mining machines.