The Argentinian government began to investigate the power usage of bitcoin mining businesses after several provinces experienced power shortages during 2021. Cammesa (the state-owned power wholesaler) has sent an email to large power users to ask if they are mining bitcoin. To coordinate a price increase, companies will have to disclose their power consumption. They also need to invest money in infrastructure.
The Argentinian government has set its sights on Bitcoin mining
To address Argentina’s current power crisis, the Argentinian Government is trying to determine the precise power consumption of bitcoin miners from its national power grid. Cammesa, the state-owned energy wholesaler, has sent a letter to all registered large-scale consumers, requesting they report the energy consumption of possible mining operations they may host, including the power consumed by what the company calls the “server group,” the refrigeration equipment to cool the miners, and other associated equipment.
According to local media reports, the Argentinian government — via the Undersecretary of Electric Energy — could be planning to take action to get miners to pay more for this energy, launching a new tariff scheme and making cryptocurrency miners invest in the power system directly. With the aim of relieving the stress these activities are causing to the national grid — which has in some instances experienced power cuts that affected more than 80,000 residents and provoked protests – this is not the right approach.
Covert Mining Operations
Local experts in cryptocurrency explained that some people have moved to be able to rent their spaces to run cryptocurrency mining operations. These businesses were not uncommon, according to an unnamed source. There are at least 200 such farms across the country.
Covert operations have been growing because of the potential for profitability that investors could achieve by avoiding taxes. For mining investors, it is possible to speed up the return on their investment. They can be able to recover their money in just six months. This compares to the ROI time of as much as 18 months with other operations.
Because of its low power prices, Bitcoin mining firms have long been interested in Argentina. Bitfarms, one such group is building a huge mining facility in partnership with a third-party that will ostensibly supply the electricity without disrupting the national grid.
Let us know your thoughts on the new measures that the Argentinian government will take to ban bitcoin mining. Leave a comment below.
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