Paraguay is set to become the new Bitcoin mining hub after the recent crackdown in China as the miners were dealt with a strong blow recently so let’s read more in our latest Bitcoin news today.
The Financial Stability and Development Committee of the State Council of China announced even harsher controls on financial risks which meant a huge blow for the miners. The announcement was the latest in China’s long-running friction with the crypto industry but this time, given the Communist Party of China and their promotion of the digital yuan it looks like the commercial operations for the miners are looking to move somewhere else.
The press release mentioned cracking down on BTC mining and trading in the bounds of controlling financial risks:
“Promote the reform of small and medium financial institutions, focus on reducing credit risks, strengthen the supervision of platform enterprises’ financial activities, crack down on Bitcoin mining and trading behavior, and resolutely prevent the transmission of individual risks to the social field.”
With Latin American countries coming on board with BTC we should expect a shift in the geolocation of BTC mining infrastructure. BTC mining hash rate did take a tumble and as per Reuters, China’s crackdown already found its way to the western province of Sichuan where the government ordered a shut down on BTC mining operations in the region:
“The Sichuan Provincial Development and Reform Commission, and the Sichuan Energy Bureau issued a joint notice, dated Friday and seen by Reuters, demanding the closure of 26 suspected cryptocurrency mining projects by Sunday.”
The reports indicated that the electricity companies in the region had to stop supplying power to the mining firms and the effect on the BTC hash rate took a sharp decline around the same time of the announcement. In mid-April, it hit a high of 180 million TH/s but since then, the data shows the hash rate dropped to November 2020 levels of 125 million TH/s. The hash rate is actually a measure of the processing power of the BTC network so the higher the hash rate, the more secure the network as some took the hash rate as a measure of the network’s health.
In the goal to attract more miners, the US via Florida and Texas put themselves on the front places to set up a shop. With a flood of Latin American Countries joining in the BTC revolution, we could see the Chinese farms favoring low costs and renewable energy sources in places like Paraguay. Paraguay is set to become the preferred place for mining operations despite Texas and Florida. Paraguay is the home to the Itaipu Hydroelectric Dam located on the border with Brazil. This is the second biggest hydroelectric dam with 14 gigawatts of output. It supplies Paraguay with 90% of the electricity and 15% goes to Brazil.
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