Bitcoin miners will pay for electricity as industrial users, in Tierra del Fuego.
According to the Government, Bitcoin mining challenges the electrical infrastructure.
The Government of Argentina established a reduction in electricity subsidies for those who mine Bitcoin and cryptocurrencies in the Province of Tierra del Fuego, in the south of the country.
The decreedrafted by the Secretary of Energy of the Ministry of Economy, bases the measure by saying that the intensity and constancy of electricity consumption by miners “presents challenges to the infrastructure” of the area to which they are connected.
For this reason, as established by law. “It is considered opportune that these users face the payment of the price of energy equivalent to the cost of supply, being inequitable that they pay the price of a residential user or another”.
The incident comes weeks after the national government blamed cryptocurrency mining for the energy crisis. During a recent heat wave, the inhabitants of the South American country suffered massive blackouts and the State found its scapegoat in Bitcoin.
The rate increase affects only those who carry out mining in a regulated manner. On the other hand, those who practice it from their homes are not required to report their activities.
However, news sources have recently reported that the Government is on the hunt for unregistered Bitcoin mining farms in order to detect if they are breaking any regulations. In dialogue with the newspaper The chronicleran unnamed official source assured: “Surely there are small hidden initiatives among residential users (households), but those are difficult to find.”
The new electricity prices to be paid are ARS 4,804 (USD 22.87) or ARS 5,126 (USD 24.40) for each MWh, depending on where in Tierra del Fuego the mining plant is located.
A residential user, on the other hand, pays almost four times less: ARS 1,852 per MWh in peak hours and between ARS 1,670 and ARS 1,760 in the rest of the hours.
The Argentine south, an unexploited paradise for Bitcoin mining
Even with the increase in rates —due to the removal of subsidies— miners in Argentina (and all users in the country, in general) are among those who pay less for the use of electricity, worldwide.
The cold climate of the Province of Tierra del Fuego, plus these low costs of electricity, make the south of Argentina an interesting destination for those who think of exercising this industry.
In fact, many considered that Argentina could be a destination for Bitcoin miners exiled from China after the ban on activity in the Asian country last year. In any case, other destinations prevailed, including the United States, Kazakhstan and, in South America, Paraguay.
Miners may prefer countries whose states explicitly support Bitcoin mining and have a clear regulatory environment (neither of those things is the case in Argentina). Anyway, in the mentioned nations, they have not been without problems, among them, restrictions in Kazakhstan and possible new taxes in the United States.