A 100% renewable energy BTC mining industry
Paraguay is the second country in America to provide a legal framework for bitcoin, including the mining industry. This is what we sensed a few weeks ago when the Deputy Carlitos Rejala has connected its laser eyes before launching a tweet with the hashtag #BTC to announce a ” important project »:
« It is a safe bet that Paraguay will activate in the field of BTC Mining. In 2018, the country’s two large hydroelectric dams produce three times its electricity needs. Energy is therefore exported to its neighbours and brings in more than $ 2 billion a year, or 1/4 of its total exports and 7% of its GDP. The two dams located on the Rio Paraná are held 50/50 with the border countries : the Itaipu dam on the Brazilian border, and the Yacyretá dam on the Argentine side of the border. »
Put another way, it is about 30 TWh/year of renewable energy that Paraguay could theoretically redirect to Bitcoin mining. That is just under half of the energy power currently required for the entire BTC network…
The timing of Paraguay is perfect given that the mining machines that were in China (half of the world’s fleet) are now looking for a drop-off point !
«Today, we are proud to present this project that will provide considerable economic, financial and fiscal benefits for our population through the consumption and use of our renewable energy, mainly from our hydroelectric plants in Itaipú and Yacireta. The country has huge surpluses that we will use for the benefit of the Paraguayan state “, said Jaina during the presentation of the project.
A law that upsets the maximalists
In June, the government of Nayib Bukele made El Salvador the first country in the world to enshrine bitcoin as a currency in its own right. But this is not exactly the path chosen by Paraguay. The country indeed enjoys its own currency unlike El Salvador which used only the US dollar until now. Ascension was content to put in place a clear legal framework to attract BTC miners.
Deputy Silva Facetti clearly stated : ” We are not talking about a project similar to that of El Salvador(where bitcoin) has become a bargaining chip. A cryptoactive is for us a commodity and a final product ».
The second article of the law states :
« This law applies to any natural or legal person domiciled in the Republic of Paraguay who is engaged in the intermediation, marketing, exchange, transfer or storage of cryptoactive virtual assets. »
The third article gives the definition of a ” cryptoactive “describing it as a ” existing asset in digital form that can be owned by anyone ». It is a ” property that can be sold and bought ».
The fourth article finally announces that minors will need to obtain a license from the Ministry of Industry and Commerce. « Any natural or legal person who has an activity of mining without authorization will be liable to sanction “, can we read in this law, half of the pages of which concern the sanctions regime…
The heart of Latin America has therefore introduced a legal framework similar to that of Iran where minors also need a license on pain of confiscation of the equipment… The purpose of the maneuver is of course to propose higher than normal electricity rates to fill public coffers.
Regrets but everything in its time
It is regrettable that the law does not exempt minors whose computing power is below a certain threshold. Given the ideal of freedom that bitcoin represents, it is not acceptable that the only path is industrial centralization. Anyone can plant fruit trees in their garden and enjoy the property of their fruits. The same should be true for BTC mining.
The fact that bitcoin has not been declared legal tender will also grieve many. This lack of ambition is perhaps linked to the recent visit of the éminence grise Victoria Nuland … We were indeed reporting on July 6 :
« Panama and Paraguay – two countries that have been following in the footsteps of El Salvador since July-received a visit at the end of June from Victoria Nuland, the US State Department’s Secretary of State for Political Affairs. The same one who said in 2014 to his ambassador in Kiev “Fuck the EU” at the time of the coup orchestrated in Ukraine by the United States… The secretary was accompanied by General Uribe as well as assistant to the US Secretary of Defense Daniel Erikson… »
Then we said that we would not be ” not surprised that Paraguay and Panama are postponing the adoption of bitcoin as a currency “following this intriguing diplomatic visit. It remains to be seen what Panama will do, which, like El Salvador, also uses the US dollar as its only currency. The absence of capital gains tax would attract billions of capital in this country that is already establishing itself as the largest financial center in Central America.
The maximalists will remain hungry but Paraguay has perhaps played its cards in the most cautious way by endorsing the strategy advocated by Michael Saylor. Namely that the most important thing is to legalize bitcoin. Its fantastic liquidity and the collapse of fiat currencies under the weight of their debt will do the rest in due course…
Journalist / Bitcoin, geopolitics, economy, energy, climate
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The words and opinions expressed in this article are the sole responsibility of the author and should not be considered as investment advice. Do your own research before making any investment decisions.
