Hive to build massive Bitcoin mining facility in Paraguay despite looming energy hikes Hive to build massive Bitcoin mining facility in Paraguay despite looming energy hikes
HIVE Digital meets with Paraguayan president to spearhead major mining growth amidst industry challenges.
2 min read
Updated: Jul. 22, 2024 at 5:32 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
In a July 22 statement, Bitcoin miner HIVE Digital said it plans to construct a 100-megawatt digital asset mining operation in Paraguay.
The move comes amid the South American country’s plans to increase electricity prices. Local Bitcoin miners believe the hike could severely affect the industry and are pushing against the government’s plan.
HIVE’s Paraguay expansion
HIVE said its planned expansion in Paraguay would add 6.5 exahash per second (EH/s) to its Bitcoin mining operations, bringing its global EH/s to 12.1 EH/s.
Additionally, the firm said it acquired 500 additional S21 Pro Antminers as part of the expansion. Once fully installed, the miners will contribute approximately 117 PH/s, pushing HIVE’s total operational hashrate to 5.6 EH/s.
The Bitcoin miner noted that these expansion plans followed meetings with Paraguayan President Santiago Peña while emphasizing that stability in government fiscal policies, such as energy pricing and taxation, will be crucial for future expansion in the country.
According to the miner, the project is expected to generate over $100 million in stable US dollar revenue for the government’s utility company over the next three years.
HIVE also stated it will offer its expertise in grid balancing and demand response to support industrial development. This will help monetize surplus or underutilized power assets in Paraguay.
Impending electricity price hike
Paraguay Bitcoin miners are raising concerns about the upcoming increase in electricity fees. They warn this could force up to 70% of the country’s legal crypto miners, who are significant customers of the authorities, to shut down.
Jimmy Kim, the spokesperson for the Chamber of Digital Asset Mining (Capamad), expressed disappointment in Administración Nacional de Electricidad’s (ANDE)—Paraguay’s national electricity commission—decision to raise miners’ costs in a statement shared with CryptoSlate.
Kim said:
“ANDE’s egregious price hikes will make legal cryptocurrency mining unsustainable in Paraguay at great loss to the economy. Up to 70% of legitimate operators could go out of business from August, causing thousands of direct and indirect job losses and threatening over $1.5 billion of planned technology and infrastructure investments.”
Kim added that Capamad recognizes the need to combat illegal crypto mining and pledged to support efforts against such activities. He emphasized that over 50 companies operate legally and contribute significantly to Paraguay’s economy.
According to him, legal mining companies have already invested over $700 million in Paraguay, marking the largest amount of foreign direct investment (FDI) the country has ever received.
On July 19, ANDE announced efforts to implement a law protecting the local electrical system, citing crypto-mining operations as the cause of disruptions in its electricity supply.
The authorities introduced severe penalties, including up to 10 years of imprisonment and the seizure and confiscation of assets used for these activities, to deter the theft of electrical energy.
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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Hive
HIVE Blockchain Technologies is the first publicly traded crypto miner which debuted on the Toronto Venture Exchange in 2017 and trades under the ticker HIVE.