Subsidized Energy Powers Argentine Crypto Mining Boom
This year, countries around the world have been experiencing crypto mining booms. Ultra-low utility rates and the resurgence of capital controls fuel the current one in Argentina. “Even after bitcoins (BTC) price correction, the cost of electricity for anyone mining from their house is still a fraction of the total revenue generated,” said Nicolas Bourbon, a digital currency miner from Buenos Aires. Argentine economic woes In the past few years, Argentina experienced cyclical economic crises. These include repeat currency devaluations, defaults, hyperinflation, and a three-year recession compounded by the coronavirus pandemic. This has made the environment fertile for the adoption of alternative payment methods, especially cryptocurrencies. To emphasize Argentina‘s current economic plight, inflation of the country’s peso is also running at about 50% annually. The plunging value of Argentinas native currency has led to the reintroduction of foreign exchange controls. While restricted from buying dollars, Argentines can also only buy $200-worth of any other currency. This has ostensibly given many of them much more incentive to migrate to digital currencies. One example of this surging local demand is bitcoins value at 5.9 million pesos ($62,316) in unofficial markets, versus about 3.4 million pesos ($35,911) at the official rate. Argentinas energy policy Besides the greater incentive to