Amid ongoing discussions surrounding the potential ban on Bitcoin mining in Paraguay, one Senator has expressed his admiration for the industry, referring to it as a “gift from heaven” for the country’s economy.
Bitcoin mining, a method of earning BTC passively, has the potential to become highly lucrative following the recent halving event.
The topic of Bitcoin mining remains a point of contention for many governments worldwide. While some recognize its potential to stimulate economic growth, others raise concerns about its environmental impact. Paraguay finds itself grappling with the decision of whether to ban mining or continue fostering the industry’s growth.
Central to the debate is the question of how Paraguay can best utilize its surplus electricity. Currently, the excess electricity generated by the Itaipu dam is being sold to Brazil. However, the expansion of Bitcoin mining could lead to increased electricity prices. Senator Salyn Buzarquis offers a different perspective, advocating for the growth of the mining industry as a means to boost the economy.
The Senator reveals that the Department of Commerce is currently assessing the potential economic benefits of selling surplus energy to the crypto mining industry. Buzarquis suggests that mining companies could represent a short- or medium-term solution for selling excess energy at market prices. Compared to Brazil’s purchase rate of $10 per megawatt hour, miners are willing to pay between $40 and $51 per megawatt hour.
Coordinating his arguments with ANDE, Paraguay’s national energy administration responsible for distributing electricity from the dam, Buzarquis highlights that the mining industry generates $100 million annually. Additionally, the industry creates business opportunities for local companies involved in the production of cables, transformers, and refrigeration equipment, among others.
The Senator predicts that revenues will continue to rise and forecasts $125 million by 2025, with $73 million allocated to ANDE. He emphasizes that this will prevent bankruptcy and facilitate the development of electricity infrastructure, stating:
“This revenue is what ANDE needs to avoid going bankrupt and to be able to invest more in infrastructure without increasing electricity prices for the people of Paraguay.”
It is worth noting that the Bitcoin network recently underwent its fourth halving event, resulting in a reduction of the BTC reward from 6.25 BTC to 3.125 BTC. Historically, this has led to a shakeup in the mining industry, with small-scale miners being displaced and larger, more efficient operations gaining an advantage.
With an anticipated supply shortage and growing demand, BTC prices typically experience an upward trajectory. This could be of great significance for Paraguay and its mining aspirations. Experts predict that the next few months could witness a new all-time high, with price projections ranging from $100,000 to $250,000.
At the time of writing, BTC is trading at $64,370 following a 1% surge in the past 24 hours. This has allowed the world’s largest cryptocurrency to recover some of its losses from the previous week and regain bullish momentum. While technical indicators point to a positive outlook, investors approach the coming weeks with cautious optimism.
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