Regardless of recent stories of bear markets and electricity rate hikes bankrupting small crypto miners across the globe, a Korean company called the Commons Foundation has announced it is opening, “the world’s largest cryptocurrency mining center and global cryptocurrency exchange,” in energy-rich Paraguay.
Commons Foundation says the landlocked country in the centre of South America has guaranteed it a 15-year stable electricity price at an equivalent of 20% of what the company currently pays in Korea.
The government has also promised to install high-speed Internet networks and create laws to govern the sector, presumably favorable.
Hugo Velázquez Moreno, vice president of Paraguay also stated in the Commons Foundation release that:
“The Paraguay government will actively support the Commons Foundation’s ‘Golden Goose project’ and provide tax breaks through constitutional revisions.”
Commons Foundation also says the government of Paraguay is, “…provid(ing)five 10,000m2 (a total of 50,000m2) areas of land for the mining centers and infrastructure,” in Ciudad del Este, a town close to the region’s Itaipu’ Hydroelectric Power Plant.
The company plans to “tokenize” the project (sell digital securities for financing) in the form of “MicroBitcoin” and claims that, “The ‘Golden Goose’ project token holders will be paid 30% of mining center profits and 70% of exchange profits…paid in MicroBitcoin (MBC) on a daily basis.”
Crypto mining firms in Washington state and Norway have recently threatened to relocate after regional authorities there decided to hike rates paid by the companies for the high amounts of electricity they consume processing transactions on various cryptographic networks.
In addition to placing a strain on existing infrastructure, local authorities have cited the fire-safety risks of running these largely automated businesses.
They have also questioned the value such businesses contribute to local economies because, once up and running, a crypto mine can be run by just a few employees and, to some degree, managed remotely.
When commenting about a recent local decision to hike electricity rates paid by crypto miners in Chelan County, Washington, Denton Meier, part owner of crypto mining companies Firefly Technologies and Silicon Orchard, said his industry could lead, indirectly, to spin off jobs:
“Looking at it in a bigger picture it’s not just mining but services that can happen around that. Like jobs creation in programming, finance, and other things that will happen over time with the cryptocurrency market. We have the opportunity to become a hub for that.”
But numerous halcyon claims about cryptocurrencies’ abilities to finance a new and “trustless” world impossible to cheat in have lately given way to widespread stories of ICO fraud, market manipulation, and outright deception.
Investors and some governments are now becoming more circumspect and are more closely examining how much real value an unregulated cryptographic token created by anyone in 20 minutes on a portal can realistically bear.