Bitcoin Miners’ Hue And Cry
It had been more than a year now since when Bitcoin miners were crying out loud against unbearable Bitcoin mining costs.
Bitcoin mining started to become an ‘unviable’ business option when the cost of production exceeded the value of the mined asset.
For example, for Bitcoin mining operations to be profitable, the value of the asset was to be more than $18,500.
However, when the crypto market crisis came, it shredded Bitcoin’s value and the asset started to be traded at as low as $15,787.53 in 2022.
So mainly from 15th November 2022 up to 13th January 2023, not a single mined Bitcoin offered any profits to miners. At least for two months, miners had to cover the excessive costs of mining out of their own pockets.
It was the toughest time with which the miners had to deal with until on 13th January 2023, Bitcoin’s value swelled up to $18,500 plus.
In between this, a number of Bitcoin miners crashed while others started to face huge financial hardships. At least now Bitcoin miners are once again making profits but still, the miners in Paraguay are crying.
Huge Electricity Costs Hurting Miners in Paraguay
There was a time when Paraguay was considered to be a hotspot for Bitcoin mining activities. However, the situation changed drastically which occurred recently when the Government in Paraguay significantly increased electricity costs.
Most importantly, the electricity rate increase has been made exclusively for crypto miners in the country.
As noted by Braiins Mining’s business developer, Nano Grijalba, Paraguay’s Government increased the rates by 50%.
Grijalba expressed that this significant rate hike is not only exorbitant but also discriminatory.
According to Grijalba, the rate has increased because the mining industry is lagging behind other industries in terms of creating job opportunities.
Grijalba criticized the Government’s decision of doubling the electricity rates for crypto miners.
He argued that miners and the mining industry have been both victimized while disregarding the fact that the mining industry is environmentally friendly.
He further argued that miners have been treated contradictory while high omission industries have been favored whose tariffs have been subsequently reduced.
Grijalba advised that the Government should have encouraged clean industry for the sake of ‘sustainable growth’ and a ‘clean future’.
Hosting Services Likely To Inflict Major Damage
Grijalba also questioned Government’s decision and stated that the decision would likely have an adverse impact on the hosting activities.
He explained that the mining industry in Paraguay is actively involved in offering online maintenance services to third parties.
He argued that at such an exorbitant tariff, the industry would no longer offer maintenance services at cheap rates.
Resultantly, business would be lost because third parties would be inclined to obtain such services from service providers outside Paraguay, said Grijalba.
Lawmakers Going After Mining Industry
The lawmakers in Paraguay are also creating problems for crypto miners. They had, earlier in mid-2022, introduced a mining regulation that specifically talked about increasing electricity tariffs for crypto miners.
However, the law could not be passed as it lacked the required number of votes in the Parliament.
Subsequently, the President of Paraguay, Mario Abdo, used his veto power and passed the law and bypassed the obstacle of the required number of votes.
President Abdo also has been criticizing the mining industry. His remarks are on record in which he addressed miners as ‘power hungry and suggested that the mining industry is less helpful in creating jobs.
He further commented that the industry is a painstaking liability usurping capital resources.
President Abdo is also concerned that if industry demands more electricity, then Paraguay would be forced to outsource energy.
According to Grijalba, the miners in Paraguay are in talks with the Government and key officials therein on the ongoing issue.
He said that soon a consensus will arrive which would enlighten the hope and Paraguay would once again retrieve attraction back.
However, there is little hope that miners would succeed in convincing the Government in Paraguay which is led by anti-mining President Abdo.