Paraguay Politicians Collapses Bitcoin Mining Industry
Massive energy hike puts miners out of business


The Paraguayan government has passed a bill to increase energy prices so significantly for Bitcoin miners that it effectively acts as an indirect ban on mining operations. The new energy tariff from the national energy company, ANDE, has risen to $59.76 USD per MWh, plus an additional 10% VAT, bringing the total to $65.736 USD per MWh.
With this increase, the cost of energy for Bitcoin mines is now about $0.066 per kWh, leading to a charge of approximately $0.077 per kWh. This makes it unprofitable for miners operating below 190 TH/s, which represents the majority of machines. Only a few air-cooled miner models operate at 200 TH/s or higher, and while some hydro miners achieve high hash rates, their initial investment is very high, making the ROI unattractive with the new energy costs. As a result, miners have no choice but to take unprofitable machines offline for now.
The only mines that will remain open are those with private energy lines to a substation. A private line means no other business exists on the line but yours. Very few mines have this because it is very expensive to build your own direct line to an energy substation. Twenty-seven shared energy line Bitcoin mines will be forced to close their doors this month, and this will most certainly cause a severe negative impact on the Paraguayan economy. Legal Bitcoin mines paid over $250 million in taxes last year to the government of Paraguay, and this will be down 90%. Every economy is interconnected, and when a country completely turns off a major economic sector overnight, there will be economic pain and fallout for all the businesses that support this industry.
Miners are fighting back.
A delegation of Bitcoin miners will be headed to Argentina next week to sign a deal to get nuclear energy to mine Bitcoin. The miners plan on taking this contract back to the Paraguayan government and using this as leverage to reverse the increase, and if not, they will move their businesses to Argentina. What is crazy is that energy from the same hydro plant will be sold to Argentina for way less than what they charge the miners, and they will, in turn, sell it to the miners in Argentina, which will help build their economy and add jobs. I don’t think the politicians grasp the magnitude of the negative economic impact on the economy, and I believe this price increase will be rescinded.