Nearly a quarter of its population lives in poverty.
The country suffers from the highest inequality of land ownership in the world.
Access to good health care is scarce, and small towns still fall victim to raids that result in burnt down homes, churches and schools.
Ciudad del Este is a city in Paraguay that sits along the border of neighboring Brazil and Argentina. Ciudad del Este is rife with crime, smuggling, cartels and… CPU’s?
While some in Paraguay are suffering on a daily basis, others have become multimillionaires in a matter of months. How are they doing this?
The Itaipú dam
The colossal Itaipú dam is situated north of Ciudad del Este along the Paraná river. Brazil and Paraguay have joint ownership of the Itaipú’s outputs, splitting them equally. But every year Paraguay is forced to sell their surplus of energy from the dam to Brazil at an extremely discounted rate.
In an interview with The Guardian, Gregorio Bareiro, an air conditioning business owner, talked about Paraguay’s newly found crypto mining industry and it’s hydroelectric resources.
“Paraguay today is the only place where there’s abundant energy,” said Bareiro enthused. “We can become the centre of global bitcoin mining.”
According to the interview, Bareiro became involved with the cryptocurrency industry when some miners came to his shop looking for cheap AC alternatives in attempt to stuff out the subtropical heat that plagues Paraguay. Bareiro now owns and rents out over 750 mining computers to Brazilians, North Americans and Europeans with plans to construct portable mining facilities.
It’s estimated that they are currently 20,000 mining units in Ciudad del Este, each and every one of them mining Bitcoin of Ethereum. Each of them constantly consuming the power produced by the Itaipú dam.
The Itaipú dam is the world’s most powerful and efficient hydroelectric dam facility. With such a large amount of surplus energy, it makes the city the perfect spot for the world’s next mining mecca.
What to do with the excess power
Many money hungry entrepreneurs and a few solemn politicians are eager to attract the owners of major mining facilities in China, the US and parts of Europe. Bareiro believes that they could lure the major mining corporations to relocate operations to Paraguay if they lower their electricity prices even further (currently around $0.05 per Kilowatt hour).
“In 10 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 …”
But others in Paraguay strongly disagree with the point of view Barrio holds. Rather than bringing in mining operations to suck up all of paraguay’s power, other believe Paraguay should focus on distributing the power equally and using it to create jobs in domestic industries.
Mining if you don’t already know, doesn’t’ create a lot of jobs. Since almost all the work is done by computers, you can have a multimillion dollar mining corporation but only 11 people on staff. Many Paraguay officials don’t want that for their country.
Those who oppose Bareiro suggest that the excess of power should be used to develop domestic industries, such as manufacturing, that will create millions of jobs and help lift people out of poverty. Paraguay has a desperate need to stimulate its economy and boosts its GDP.
Technology is the way to go
Whether you’re on Bareiro’s side or not, there seems to be a general consensus amongst the people of Paraguay that technology is the way to go. With the Itaipú dam standing tall over Cuidad del Este, and the rumble of its hydroelectric power clear to all, the next move for Paraguay is to develop it’s tech industry.
“If the country takes advantage of Itaipú now, while its population is still small, “it could put Paraguay on the edge of the technological frontier,”” Cristine Folch of Duke University stated in The Guardian interview.
Weather Paraguay decides to pursue the attraction of miners, tech giants, or manufactures, it’s clear that Paraguay is an emerging tech capital in the world.