Argentinians turn to Bitcoin mining to support livelihood amidst failing economy |
As the Argentine peso continues to drop in value, Argentinians are turning to Bitcoin mining to support their livelihoods amid a failing economy. A report from the country’s central bank estimates that the percentage of households that run their own Bitcoin mining facilities has risen from 1.5% in 2015 to 5% in 2017. As Bitcoin’s value continues to rise, Argentinians are facing a dilemma: stop mining or accept the declining value of the peso.
Bitcoin fever has struck Argentina, with the digital currency soaring in popularity as banks reject the majority of their requests for credit. Apparently, the Argentine economy is in crisis, with unemployment at a staggering 40%. With skyrocketing inflation and a currency that has lost over half its value in the last year, Argentines turn to Bitcoin mining to support their families.
Bitcoin is becoming increasingly popular in Argentina as alternatives to the failing economy are sought. Rising inflation and government controls on capital have driven many Argentinians to turn to bitcoin as an alternative to government-issued currency. In spite of the dangers of bitcoin mining, some see it as an opportunity to earn a living by spending their days solving complex equations for bitcoin.. Read more about what does mining crypto mean and let us know what you think.
In the midst of the economic crisis, the extremely low cost of electricity allows Argentines to make money by mining bitcoins (BTC), while foreign miners try to get their share of the electricity pie, local media reported. Locals are not the only ones to benefit, as Bitfarms, a Canadian bitcoin mining company, has announced the opening of a new mining facility in the country.
Devaluations, defaults, hyperinflation, foreign exchange controls and a dash of ultra cheap electricity proved to be the main ingredients to stimulate local mining companies. Local miners benefit from the electricity subsidies Argentina has long provided to the population, a policy aimed at winning political votes but causing tensions within the ruling Peronist coalition. Even after the bitcoin price correction, electricity costs still make up a fraction of total income for those who mine at home, Nicolas Burbon, a Buenos Aires-based miner, said in a report to Bloomberg. With capital controls limiting legal trade to as little as $200 per month, inflation is rising at about 50% per year, fueling the demand for any kind of security. The panic over hedging non-eso assets continues to drive up the value of bitcoin in unofficial markets, only increasing the number of reasons to mine the cryptocurrency.
Canadianminers take advantage ofopportunities
Bitfarms has contracted for a direct connection to a local power plant to purchase 210 megawatts of natural gas generated electricity. The proposed new mining facility is close to the utility and therefore the power contract does not include a connection to the local power grid, which has the advantage of not shutting off power during periods of abnormally high consumption, Bitfarms said in a statement. Today, the company has a diversified production platform with five plants in Quebec, all powered by 100% clean hydroelectricity. Bitfarms mines the 1,000th #Bitcoin with hydropower this year pic.twitter.com/kdlSADj1tY – Bitfarms (@Bitfarms_io) 28. May 2021 We looked for places that had rebuilt their power plants. Economic activity in Argentina is declining and electricity is underutilized. So it was a win-win situation, says Jeffrey Morphy, president of the company. The initial term of Bitfarms’ contract in Argentina is eight years, with an effective electricity price of $0.022 per kilowatt hour for the first four years.
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In 2014, Argentina was the third biggest bitcoin mining country in the world. The country has since witnessed a sharp decline in bitcoin mining activity, and now bitcoin miners often have to work multiple jobs to help pay for food, rent, and other basic needs. Digital currency is playing a large part in the media and economy of Argentina, a country which has seen its currency devalue by 40% over the last 12 months.. Read more about can i mine bitcoin on my phone and let us know what you think.
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