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Bitcoin Mining Ban Threat: Paraguay Faces $200M Economic Plunge

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Bitcoin mining has been a hot topic in Paraguay recently, with discussions revolving around the potential ban on crypto mining in the country. The debate intensifies as the economic implications come to light. According to Jaran Mellerud, co-founder of Hashlabs Mining, the consequences of such a ban could be dire for Paraguay’s economy.

The proposed bill to ban crypto mining, citing issues of power theft and disruption to the electricity supply, has sparked controversy since its introduction on April 4. If enacted, it could result in a loss of over $200 million annually for Paraguay. This staggering figure underscores the significant role Bitcoin mining has played in the country’s economic landscape.

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Paraguay, despite its relatively small population and GDP, has seen a boost in its trade balance thanks to Bitcoin mining activities. With firms like Marathon Digital Holdings investing in the region, the industry has thrived, leveraging the abundance of excess electricity from the Itaipu hydroelectric power plant. However, concerns over power interruptions and damages have prompted lawmakers to consider the ban.

Bitcoin’s Role: Balancing Challenges and Economic Potential

Mellerud acknowledges the challenges posed by illegal mining operations, which have reportedly caused disruptions and financial losses. Similar issues have arisen in other countries, such as Kazakhstan, prompting government intervention. However, a blanket ban risks stifling a burgeoning industry that has the potential to bolster Paraguay’s economy.

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Moreover, the timing of this debate coincides with the upcoming Bitcoin halving event, which will reduce miner rewards by half. This event could further impact the profitability of mining operations, adding another layer of uncertainty to the industry’s future in Paraguay.

Despite the concerns raised by lawmakers, Mellerud remains optimistic about the potential of Bitcoin mining in Paraguay and neighboring countries like Argentina. Lower electricity costs and abundant energy resources make these regions attractive destinations for miners seeking to expand their operations.

In conclusion, while the proposed ban on Bitcoin mining aims to address legitimate concerns regarding power consumption and infrastructure strain, its potential economic repercussions cannot be ignored. Paraguay stands at a crossroads, weighing the benefits of a burgeoning industry against the challenges it presents. As the debate unfolds, stakeholders must carefully consider the long-term implications for the country’s economy and technological innovation.

Paraguay’s Bitcoin [BTC] Bill Targets Mining and Trading

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A highly anticipated bill seeking to regulate mining and trading in Bitcoin [BTC] and other crypto-assets in Paraguay finally gets the green signal from the country’s Senate as per a recent announcement. Revealing more about the same, Senator Fernando Silva Facetti, one of the co-authors of the bill, said on his official Twitter handle that the bill will be debated in Paraguay’s Chamber of Deputies in the year 2022.

According to the bill, the Industry and Commerce Secretariat will be overseeing crypto mining in the country, with the help of the Anti-Money Laundering Office and the National Securities Commission. In addition to that, the National Electricity Administration will be involved in the activity’s regulation. Interestingly, the cost of electricity in the South American nation is the lowest in the region costing a mere $0.05 per kilowatt-hour, according to Paraguayan Congressman Carlitos Rejala, who further added that nearly 100 percent of energy output originates from hydroelectric sources.

Earlier in July this year, in an interview with a leading media firm, Rejala gave an insight into the draft bill that was released then. The bill hinted at stronger regulatory control from the country’s regulators in terms of bitcoin mining, as well as providing safety to investors from enterprises that offer bitcoin services.

During that time, Rejala said,

“With this we want to welcome the innovation of cryptocurrencies in Paraguay to the world. This is the result of a very strong and arduous teamwork of many experts in the field, both local and foreign.”

Bitcoin nearing its end?

With BTC price has been laying low, academic Eswar Prasad of Cornell University went on to predict an apocalyptic picture of the king coin’s survivability in the near future. Emphasizing that ” bitcoin is not serving well as a medium of exchange” owing to its high volatility and is environmentally destructive”, eventually leading users to look for other crypto-assets with enhanced use cases.

Well, not all is doom and gloom, in a recent survey conducted by CNBC revealed that a staggering 83% of millennial millionaires own cryptocurrencies and that they’re planning to add more in 2022 despite the ongoing price drawdown in the crypto market.

Senators Halt Bitcoin Mining Ban, Anticipate $125M Revenue Surge

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Paraguay finds itself at the center of a contentious debate surrounding Bitcoin mining, as lawmakers weigh the potential benefits and drawbacks of embracing this burgeoning industry. In a recent turn of events, Paraguayan senators have put a temporary halt to a proposed blanket ban on cryptocurrency mining, opting instead to explore alternative avenues.

The proposal to ban Bitcoin mining for 180 days arose in response to concerns about illegal mining operations siphoning off power and disrupting the country’s electricity supply. However, a shift in perspective has led officials to consider leveraging the surplus energy generated by Paraguay’s Itaipu hydropower plant for mining activities.

Senator Salyn Buzarquis has spearheaded efforts to investigate the economic advantages of redirecting excess energy towards Bitcoin mining operations. With 45 licensed cryptocurrency miners projected to contribute millions in revenue to the National Electricity Administration (ANDE), the potential financial windfall is difficult to ignore.

Buzarquis outlined a plan where selling excess energy to Bitcoin miners at competitive rates could not only bolster ANDE’s finances but also inject millions into the national treasury through value-added tax. Moreover, the influx of revenue could pave the way for increased investment in infrastructure, potentially averting a financial crisis for ANDE.

Concerns Beyond Bitcoin

Beyond the economic implications, proponents argue that embracing cryptocurrency mining could create much-needed employment opportunities in Paraguay. However, concerns persist regarding the impact on the country’s energy infrastructure and the reported instances of power interruptions linked to illegal mining activities.

The debate holds significant implications for major industry players like Marathon Digital Holdings, which have recently expanded operations into Paraguay. As the cryptocurrency community braces for the upcoming Bitcoin halving event, which is poised to reduce miner rewards, the outcome of Paraguay’s deliberations could reverberate throughout the global mining landscape.

With a public hearing scheduled for April 23, stakeholders from various sectors will have an opportunity to voice their perspectives on the matter. As Paraguay navigates this pivotal juncture, the decisions made in the coming weeks could shape the country’s stance on Bitcoin mining for years to come.

Bitcoin Mining Evolution Sparks New Era Of Sustainability And Efficiency

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The technical nature of mining for Bitcoins is subject to ever-increasing innovations and an increasingly unpredictable market. This is the direction of this coal mining that would be going through momentous changes. The way how bitcoin miners are about to undergo restructuring will have local, as well as global, impact.

.According to a recent report, over 6k outdated Bitcoin mining machines in the US are going to be refurbished and relocated to certified crypto mines in other countries. Alongside, it is worth mentioning that this paper is also very timely, considering that the entire bitcoin miners and investors community are eagerly waiting for the next halving period, which could bring new uneven tools and thus allow the miners to take more advantage of the uncertainty that crypto mining industry entails.

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The incident between Sunnyside Digital – a higher-ranked North American digital hardware company – and the distribution is the source of the change. The company has designated a warehouse in Colorado Springs for the refurbishment and reconditioning of these mining machines. Post-overhaul, the machines will be exported to markets, with the lowest rates of electricity, most likely in South America and Africa. Their production will increase and the efficiency of their operational tasks will improve and mining activities will become sustainable.

Bitcoin’s Green Turn

Taras Kulyk the main driver of Sunnyside Digital as the CEO, said this direction would be a natural transition for the field. He calls attention to the especially important role of expenses on electricity in mining processes and states that, along the same lines, many mining operations start getting attracted by the low energy tariffs available in a particular area. Klyck’s story is an adventure that is enhanced during his effort to give repaired mining equipment for example from Paraguay Tanzania, Uruguay, and, Ethiopia, Specifically, there has been increased demand during halving periods.

Bitcoin halving, set to happen in April 2024, would reduce mining reward to 3.125 from 6.25. The Bitcoin faithful in the mining community will be keeping their fingers crossed about this quinquennial for virtual currency may be steered in the inward-sloping direction of the price, or the opposite.

The profitability of newer mining models like the S19 series compared to U.S electricity prices, which is higher, its effectiveness is lowered. On the other hand, Mr. Jaran Mellerud, CEO of Hashlabs Mining stations, positioned in Dubai, argues that such models still can sustain the level of high income and remain in the areas with lower costs.

It has been a terrible round for these used S19 machines: their valuation, which was $7,030 in March 2022, dropped until it reached a historic low of $427 in March 2024, and the prospects for the next quarter are very bleak. The revolving price stands for the growing dynamic in the Bitcoin mining ecosystem; it allows miners to create an economic balance and this way to adjust to technological advancements.

Besides, this project gives a new life to uncouth hardware, functioning as a tactical move to a more eco-friendly and economical strategy. Thus, by means of post-numismatic techniques, including equipment customizations, validators find a chance to extend the life-cycle of up-to-date equipment and to enhance the mining capacity area by area creating a balance within the industry as a whole.

Bull Bitcoin’s Costa Rican Expansion Fuels Crypto Adoption Surge

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In a groundbreaking move, Bull Bitcoin, the Canadian-based non-custodial Bitcoin exchange, has forged a strategic alliance with SINPE Movil, Costa Rica’s leading fiat payments system, and Bitcoin Jungle, a local crypto wallet solution.

According to a press release by Bull Bitcoin on September 14, this partnership will empower Costa Ricans and international visitors to convert their local currency, Colones, into Bitcoin seamlessly and vice versa. Additionally, Bull Bitcoin will facilitate conversions to and from bank accounts (IBAN) in both Colones and USD through conventional bank transfers.

Executing transactions through the Bitcoin Jungle wallet, users can acquire Bitcoin by sending their fiat currency to Bull Bitcoin via SINPE Movil, resulting in the corresponding BTC being deposited directly into their Bitcoin Jungle accounts. This streamlined process expedites Bitcoin-to-fiat conversions for merchants and fortifies confidence in accepting Bitcoin payments.

Bull Bitcoin’s Global Expansion

This venture for Bull Bitcoin into the Costa Rican market signifies the commencement of a broader international expansion. Over the next year, the company aims to extend its services to a global audience, targeting “over a billion people.” This marks a substantial leap from its decade-long exclusive presence in Canada, serving a population of 35 million.

Costa Rica joins the Latin American nations encompassed by Binance’s “Send Cash” initiative, unveiled in August. This innovative program introduced a revolutionary crypto-to-bank account payment solution for users in Honduras, Guatemala, Costa Rica, Paraguay, the Dominican Republic, Panama, and Mexico. Leveraging Binance Pay, users can seamlessly transfer funds to recipients holding bank accounts in Colombia and Argentina.

The collaborative prowess of Bull Bitcoin, SINPE Movil, and Bitcoin Jungle promises to redefine cryptocurrency adoption in Costa Rica. This partnership marks a pivotal moment for the nation and underscores a broader trend toward augmented financial inclusivity within the region. With concerted efforts, cryptocurrency adoption and utilization potential are poised to surge, reshaping Costa Rica’s financial landscape.

Related Reading:| Bitcoin’s Bittersweet Journey In Canada: A Year Of Decline & Resilience

El Salvador’s Big Crypto Meet, 44 Nations Are Set To Participate

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On 16th May, El Salvador President Nayib Bukele is set to host bank representatives from 44 countries to discuss financial inclusion, digital economy, banking the unbanked, El Salvador’s Bitcoin rollout, and its benefits in the country.

Sharing the news via Twitter, Bukule stated that 32 central banks and 12 financial authorities would be attending the meeting.

The participants include the Central Bank of Paraguay, State Bank of Pakistan, General Superintendency of Financial Entities of Costa Rica, Superintendence of the Popular and Solidarity Economy of Ecuador, and the Central Bank of El Salvador to name a few.

On Friday, May 13, the Twitter account for Bitcoin Beach announced that “Central bankers from Angola, Armenia, Bangladesh, Burundi, Congo, Costa Rica, Egypt, Gambia, Ghana, India, Namibia, Senegal, Sudan, Uganda, Zambia, and 25 other developing countries are getting on planes today to fly to El Salvador.”

Shortly after President Bukele’s official announcement, Bitcoin Beach tweeted out a map of the world that highlighted countries who have either adopted BTC already or are attending Monday’s meeting filled in with color, saying “Probably nothing.”

El Salvador’s president went all-in on Bitcoin

According to Bloomberg data, Bukele’s administration has spent a total of $103 million on 2,301 bitcoins since making bitcoin legal tender in September 2021. It has also witnessed the value of its massive cryptocurrency investment plummet by $36 million as bitcoin dropped over 50% from its all-time high on 12th May. 

This brings the valuation of the coin to around $67 million. The Central American nation currently owes an estimated $23.3 billion in national debt. 

Bukele’s bullish investment in cryptocurrency has led to a divided reception by the country’s citizens, with past bitcoin protests drawing thousands of attendees. 

Despite all the criticisms and the nation’s burgeoning debt issue, the Salvadoran Strongman remained undeterred and went ahead with his Bitcoin purchase, declaring “El Salvador just bought the dip!” on May 9.

The investment was the country’s largest to date, adding 500 BTC, priced at an average of $30,744 each to its reserves. 

That said, Bukele’s latest meeting announcement that invited top regulators around the world would be closely watched by both proponents and cynics.

Billionaires rallies behind Bitcoin amidst fear that fiats might end up in hell

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Bitcoin [BTC] is tipped to hit the $220k mark in 2022 as billionaires across the globe are increasingly purchasing the world’s biggest cryptocurrency as a hedge against inflation amidst fear that fiat currencies might end up becoming redundant according to BTC supporter Max Keiser. In an interview, Keiser spoke in detail on the outlook of the king coin for 2022 stating,

I’m pushing my $220,000 prediction to 2022. All of Bitcoin’s fundamentals are screaming higher. The China mining ban last year was a temporary hiccup. I’m on my way to El Salvador where the Bitcoin revolution will expand and push fiat money into extinction.

Interestingly, the news comes after Hungarian-born American billionaire Thomas Peterffy, who was once against cryptocurrencies, said it was safe to invest two to three percent of his personal wealth in cryptocurrency, in case fiat money “goes to hell”. Peterffy, founder and chairman of Interactive Brokers Group, offered its clients the option of trading Bitcoin, Ethereum, Litecoin, and Bitcoin Cash in mid-2020 as demand for the assets rose. The broking firm plans to offer crypto trading by adding around five to ten more coins starting this month.

The billionaire said that “it is possible for cryptocurrencies to generate extraordinary returns, although the reverse is also true”. Another high-net-worth investor who is a staunch proponent of the asset is Ray Dalio. The CEO of Bridgewater Associates recently revealed that he has BTC and Ethereum in his wallet and said it is prudent to invest in cryptocurrencies because “money is a dumpster” and inflation diminishes purchasing power.

Apart from that, nearly half of the family offices that Goldman Sachs Group Inc. does business with were interested in adding cryptocurrencies to their portfolios. To top that Prominent investor, Cathie Wood of Ark Investment Management, expects BTC to hit $500k in the next 5 years.

Bitcoin’s bullish forecasts in 2022

On New Year’s Eve, President of El Salvador Nayib Bukele tweeted on his predictions on Bitcoin for 2022 where he made some ambitious statements for the asset. The most interesting among them are the two more countries will make it legal tender. Speculators believed one of them might be Paraguay as a proposal to regulate BTC mining and trading was approved by the Paraguayan Senate, a few weeks ago.

Under constant threat, Chinese operators secretly carry out mining activities

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Chinese miners are secretly continuing their underground operations despite the nationwide clampdown on Bitcoin [BTC] mining rigs by the country’s authorities back in May 2021. As per estimates, nearly 20% of miners stayed back during the mass exodus whereby they kept working under the government’s radar through a combination of grid electricity, hydro-power, and internet protocol address manipulation to protect their identities. So how do they do it?

A miner from the Chinese province of Sichuan spoke under the condition of anonymity revealed that he has been working day and night to avoid the authorities’ attention. He along with other crypto miners who have gone underground since the Beijing crackdown earlier this year is adopting unique tactics to evade detection. 

Revealing on his stealth operation, the miner mentioned how he spreads his mining equipment across multiple sites so that no one operation catches the eye on the country’s electrical grid. In addition to that, he also divulged that he goes “behind the meter,” drawing electricity directly from small local power sources that are not connected to the larger grid, such as dams that are less likely to attract government attention. Further, he has taken steps to hide his geographic digital footprint, as well.

Data from a Chinese cybersecurity firm Qihoo 360 shows that crypto mining continues to thrive in the state even after the ban. As per a November report, there are an average of 109,000 active crypto mining IP addresses in China on a daily basis. Most of those addresses are located in the provinces of Guangdong, Jiangsu, Zhejiang, and Shandong.

The reason behind the Chinese crackdown

For one, China is experiencing severe power shortages, a resource vital for bitcoin mining. Secondly, Beijing has also made it clear that crypto mining stands in the way of its aggressive climate targets, as it pushes to achieve carbon neutrality by 2060. Apart from that, the state perceives cryptocurrencies as a threat to its digital yuan. Fred Thiel, CEO of Marathon Digital Holdings and a member of the Bitcoin Mining Council said,

“China’s government is doing everything they can to ensure that bitcoin and other cryptocurrencies disappear from the Chinese financial systems and economy. Part of this is to ensure the adoption of China’s central bank digital currency, and part of this is most probably to ensure financial surveillance activities are able to see all economic activity.”

China is in no mood to alleviate the crypto crackdown

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China’s cryptocurrency ecosystem is currently in the throes of turmoil. The lawmakers in the country are still planning to continue a crackdown on cryptocurrency trading and speculation. In fact, the People’s Bank of China [PBoC] said it will keep pressure on the market citing “illicit activities” as a reason behind its move while simultaneously lauding its effort on the aggressive crackdown this year.

In an official statement, the central bank of the country that it aims to counter potential financial risks and reduce the number of high-risk financial platforms in key provinces. The People’s Bank of China also reemphasized that its monetary policy will be flexible, targeted, reasonable, and appropriate and pledged to enforce a good “cross-cyclical” policy design.

The bank also mentioned that it is seeking to expedite its work to formulate a financial stability law. This is in line with Deputy Governor Liu Guiping’s previous proposal revealed in March. The latest development comes just a day after the Chinese officials met to discuss work priorities for the second half of 2021.

China’s crackdown, a windfall to global Bitcoin mining market

Chinese lawmakers had earlier launched an intense crackdown on crypto trading and mining immediately after Bitcoin’s tremendous bull run above $60K that led several altcoins to post massive gains and shoot up to levels never seen before. This was enough to amplify authorities’ concerns over risks of fraud, money laundering, including excessive energy usage. The policymakers of China soon forced a string of regulatory actions attacking monopolistic behavior at well-known online payment firms such as Ant Group Co. over the last couple of months

Furthermore, the series of clampdowns had a damaging effect on the mining industry in China. According to various reports, at least eight China-based Bitcoin mining firms are now eyeing to relocate operations to Paraguay. This comes just a few weeks after Juanjo Benítez Rickmann, who happens to be the CEO of the Paraguay-headquartered mining platform Digital Assets S.A. acted as an advisor to a recent Bitcoin bill that seeks to regulate miners in the South American country and to draw foreign businesses.