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Paraguay’s Biggest Dilemma: Use Energy for Bitcoin or Economic Development

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For Paraguay: To invest more in cryptocurrency or bitcoin mining or for economic strategies to uplift rampant poverty in this South-American country.

Paraguay is blessed abundantly with natural resources and energy is one resource which is plentiful, thanks to the mighty Itaipu dam. A debate now rages on the utility of the energy generated by this dam – to invest more in cryptocurrency or bitcoin mining or for economic strategies to uplift rampant poverty in this South-American country.

 

Itaipu’s blessings

Cities in the developing economy of Paraguay are suddenly adopting bitcoin and Ethereum mining thanks to their proximity to the mighty Itipau’s hydel power generation capability.

The country has roughly 20,000 such units and continues to mushroom at the unlikeliest of the places, quickly replacing the drug smuggling, cartels and other illegal activities which are local to the area, thanks to drug lords and warring factions.

 

Paraguay sitting on bitcoin mining power

Considering the employment and productivity opportunities crypto-mining is offering its people, Itaipu’s incredible power generating capacity is highly appreciated.

However, the infrastructure – namely computers and cooling systems which are by default necessary for mining bitcoin is a disadvantage.

The other side of the bitcoin mining argument is that the government and its administrators should seriously pursue a populist policy and work towards the liberation of its people from poverty.

The divide between the rich and the power in Paraguay is very lop-sided, and according to reports issued by the World Bank, the country has one of the highest levels of inequality in terms of land ownership.

According to a tech entrepreneur Barreiro, who is offering indigenous cooling systems for mining infrastructure,

“Paraguay today is the only place where there’s abundant energy. We can become the center of global bitcoin mining.”

Since Itaipu dam output far exceeds the country’s consumption needs, Paraguay is often found selling their share of the power generated with co-sharer Brazil. However, the prices at which this transaction is far below the standard market prices, thus pushing Paraguay into a loss-making venture.

The power in domestic markets is priced $0.5 per kilowatt hour.

This surfeit of power availability has also resulted in attracting a huge number of startup and other industries into Paraguay.

For entrepreneurs like Barreiro, the number of units being started in Paraguay is very less and limited. He recommends that the government should seriously explore cutting power prices further so as to attract the China-based factories to Paraguay. Nearly 150,000 units can thus be attracted the cooling –equipment manufacturer.

Further, industrialists should be encouraged to develop cryptocurrency-backed units, even as the debate languishes among politicians and other stakeholders who would rather explore mainstream options. Besides, their current focus is only sharing the financial dividends available from the dam’s production. In 2023 they want to gain more from Itaipu’s blessings.

 

Researchers’ recommendation

The debate also considers the outcome suggested by researchers who recommend the use of energy produced by the dam to build local and native production/manufacturing sector and thereby provide jobs for nearly 2m. This would also have indirect benefits such as quadrupling GDP of Paraguay.

#Bitcoin

Donald Trump policies push Mexico to Bitcoin

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Mexico has seen a new all-time high trading volume on localbitcoins. This comes out on the back of the announcement from the Trump Whitehouse.

Mexico has seen a new all-time high trading volume on localbitcoins. This comes out on the back of the announcement from the Trump Whitehouse that remittance payments of Mexican migrants in the United States of America will potentially be the target of new restrictions essentially ending the possibility of Mexican migrant workers to be able to cheaply send money back home to their families.

 

Mexico adopting Bitcoin:

Mexico has been experiencing a massive increase in the number of transactions on localbitcoins. Mexican migrant workers are believed to be exploited by the remittance companies which are charging around 10% fees. What is essentially being discussed here by the Trump Whitehouse is a new tax on these migrant workers. The number that they are currently floating around is a 3% tax on the remittances going from the USA to Mexico. This may not seem super crazy but considering the $33.4 billion which were sent to Mexico in 2018 alone, that extra 3% could mean $1 billion more per year for the United States government.

 

98% of the transactions that were sent during the last year, were sent via electronic means which means that there is actually a very strong remittance route that is ready for mass disruption going from the United States to Mexico and Bitcoin could be the perfect answer. However, the average size of a remittance payment from the United States to Mexico is $322 last year and the problem is that if the fees rise again exponentially on bitcoin, then bitcoin might not be the ideal cryptocurrency for these kinds of smaller remittance payments. Maybe we are going to see some other cryptocurrency being adopted in that situation. But regardless of which cryptocurrency is used, we can see that there is a clear need for disruption as government policies again seeks to impede or overly exploit the free float of money.

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Bitcoin Crashes Downwards: Is BTC Going to Fall Back to $4000?

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Bitcoin fell down to test the $5000 support level. If the current support around $5000 is broken, BTC might really crash to $4500 and $4200 support levels.

Bitcoin fell down to test the $5000 support level which is the most crucial level for BTC currently. The downward correction started after bitcoin tested the $5500 resistance level yesterday at around 18:00 UTC.

 

The resistance around $5500 proved very strong and pushed the price downwards sharply. The sharp declining pattern attracted a lot of sellers which even pushed the price below $5200 support level and BTC tested the $5000 support reaching up to $5018.

BTCUSD Price Chart- Coinbase

BTCUSD Price Chart- Coinbase

Bitcoin is currently trading around $5070 (at the time of publication) showcasing a bearish pattern.

 

Bitcoin Price Drop:

The sudden price drop has led to people speculating that BTC might soon crash back to the $4000 range. Earlier, analysts were also predicting the sudden rise of bitcoin to be a conspiracy. Also, Bloomberg had also called the sudden rise a Blip. If BTC had successfully crossed over the $5500 range, the next major resistance was around $5800, however, BTC fell sharply losing more than $400 in value over the last 24 hours.

 

The bearish move does not clearly indicate a crash towards $4500 and $4000 range, however, if the current major support around $5000 is broken, BTC might really crash to $4500 and $4200 support levels. With the price of bitcoin falling, other major altcoins are also in the red zone today with Ethereum falling more than 8% in the last 24 hours, XRP falling more than 6% and Litecoin falling around 12% in the last 24 hours.

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China to completely ban crypto mining: Bitcoin about to Crash Hard?

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As reported by Bloomberg, China is moving towards putting a complete ban on mining bitcoin and other crypto as it causes serious wasatage of resources.

As reported by Bloomberg, China is moving towards putting a complete ban on mining cryptocurrencies such as bitcoin. In accordance to a document posted by the National Department and Reform Commission of China, the mining of cryptocurrencies should be completely banned as it causes serious wasatage of resources.

 

China is known to be the largest hub of cryptocurrency mining with huge mining rigs been set up in the country. Earlier, China has also banned small investors to invest in security token offerings or STOs and only large investors with more than $1 million funds are allowed to invest in such projects. Now, the country is planning to take strict action against cryptocurrency miners in the country.

 

Cryptocurrency miners were earlier attracted to China due to their cheap electricity rates and subsidies in the country, however, due to the strict actions being taken by the government with the guidelines of the NDRC which has disincentivized cryptocurrency mining, a lot of miners have shut down their operations or moved to other nations.

 

Largest Mining Pools in China:

China has been a hub for some of the largest cryptocurrency mining polls. Even though the mining pools have been shifting to other countries, there has been some effect of the ban on the market for bitcoin and other cryptocurrencies as the mining is a major part of the overall working of cryptocurrencies.

 

How do you think the complete ban on cryptocurrency mining in China will effect the bitcoin price? Tell us in the comments section below.

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