A remote area of Paraguay close to the borders of Brazil and Argentina is developing its own crypto mining sub- culture thanks to the world’s largest dam.
Itapúa Hydroelectric Dam is the largest operational hydroelectric energy producer in the world, with an installed generation capacity of 14GW. Its guarded by armed patrols and situated on the outskirts of Ciudad del Este, a Paraguayan border town which has become a hotbed for smuggling, cartels and drugs. The town of 300,000 has gained a reputation as being part of Paraguay’s lawless wild west.
Where there’s a dam, there’s sure to be power and a growing group of crypto miners isn’t wasting the opportunity. In an industry which has virtually sprung up overnight, an estimated 20,000 units are now generating Bitcoin and Ether.
Neighboring Brazil sells its energy at five times the price of its poorer cousin, which makes Paraguay an attractive proposition for would-be miners. A fact that hasn’t been wasted on many, according to Gregorio Bareiro, who has seen his air conditioning business rocket since the CPUs came to town. “Some people have become multimillionaires,” he says.
Bariero now provides miners with cooling systems and rents out 750 computers of his own, mainly to Brazilians, Europeans and North Americans. He now hires a dozen staff and has his own plans for installing mines in portable trailers. He sees the potential in Ciudad del Este for lifting the struggling economy, if it were approached on a grand scale. “Paraguay today is the only place where there’s abundant energy,” he pointed out. “We can become the center of global Bitcoin mining.”
The newly-established entrepreneur-cum-air-conditioning-salesman feels that if Itaipú’s power were used to reduce energy prices, the Chinese owners of the 150,000 units might be lured to Paraguay. “In ten years, it would generate enough money to pay Paraguay’s external debt,” he suggested. “With our resources, we ought to have electric helicopters, drones for transporting goods…”
Cristine Folch of Duke University sees data centers powered by clean energy enticing the likes of like Google, Apple and Facebook putting “Paraguay on the edge of the technological frontier”.
The dam certainly has the potential to change lives for the better, one that has already been missed due to politics and corruption. Miguel Carter, a Paraguayan development expert explains that by negotiating a fairer price for its energy, Paraguay could fund its hospitals, schools and railways – all in dire need of upgrading.
Carter saw the potential for a better world lost when Brazil beat Paraguay to the signing of the 1973 Itaipú treaty which lost Paraguay a potential USD 57.7 billion in income. Also in October of this year, it was confirmed that Brazil’s military regime murdered its ambassador to Paraguay in 1979 to prevent the revelation of billions of dollars in kickbacks during the construction of the dam.
“When I saw the numbers I burst into tears,” Carter said. “I know of so many stories of Paraguayans going to hospital and losing their loved ones… there would have been lives saved, kids with a decent education. You could have had a different country.”
Similarly, another study group is calling for energy created from the dam currently sold overseas to be redirected back into the Paraguayan economy with the potential to create 2 million jobs, quadrupling GDP.
It appears that the new spate of crypto mining is the latest in Itapúa’s colorful history. It remains to be seen in whose hands this wealth of resources finally ends and if it contributes to simply creating more wealthy individuals or a wealthy national economy.
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