Bans against Bitcoin (BTC) mining in China and the exodus of digital miners could open up business opportunities in Latin America. A percentage of the companies specialized in this sector of cryptocurrencies would come to the region to install their computing power or hash rate. The main destinations would include Venezuela, Paraguay and Argentina.
This was revealed to CriptoNoticias by Theodoro Toukoumidis, CEO of DoctorMiner, a Venezuelan company dedicated to mining Bitcoin and cryptocurrencies. According to the executive, Latin America would favored as miners would have to diversify their processing power and not to install it exclusively in the United States, for example, a country that is already attracting investment in this area.
“Everything that is happening in China with the prohibition of cryptocurrency is going to splash Latin America with the exodus of processing power, especially to countries like Paraguay, Argentina and Venezuela. I believe that Paraguay and Venezuela could lead this movement as long as we are sincere and clarify the regulatory situation, “explained Toukoumidis in an interview with this newspaper.
The CEO is one of those who thinks that, if all the Chinese hash rate goes to the United States, then they would be making the same mistake of having all the investments in the same country. Latin American mining companies are proposing to diversify and share infrastructure megawatts.
In the case of Venezuela, Toukoumidis said that he is aware of the problem that the electricity generation, transmission and distribution system has. However, he argued that, if a tariff scheme is established in accordance with the mining activity, there could be profitability both for the miners and for Corpoelec as an energy provider. The biggest aspect that would encourage mining in the country is that it is a legalized economic activity.
About Paraguay, the main strength is that there are energy surpluses in its generating plants. In the case of Argentina, the fact that multiple companies in the cryptocurrency ecosystem have their base of operations in this southern cone country could influence.
Theodoro Toukoumidis (right) together with Paraguayan deputy Carlos Rejala (center) and Juan José Pinto, Doctorminer’s head of infrastructure. Source: @doctorminer_ / Twitter.
“The experience of the Chinese can be very important for local mining. You have to talk about the region, Latin America, beyond the companies or the country. In the end, there is the same in all countries: taxes, regulations and inspections for the importation of equipment, “added Toukoumidis.
Miners’ exodus would take up to 18 months
Moving thousands of specialized ASIC equipment and transporting all its related infrastructure out of China is not an easy task. The exodus of the miners would take at least 8 to 18 months, according to Toukoumidis estimates.
The “move” would include the miners themselves, but also various electrical supplies, ventilation parts, wiring, and computers. We should also take into account the time would take the procedures for export, the trip itself, the contracting of energy services and other suppliers.
Another point that the manager highlighted is that not all Chinese miners will continue to mine cryptocurrencies after the restrictions. “That will lead to a greater supply of machines. At least 20% will not continue in the business due to these types of problems, “said the CEO.
In relation to the miners who have claimed that they would not go to Venezuela due to political instability, Toukoumidis said that it is ironic that they do not want to settle in the country for that reason when “they are leaving China in a race because they were prohibited from doing business.”
Conditions to mine bitcoin in Venezuela
Since September of last year the mining of Bitcoin and cryptocurrencies is a legal activity in Venezuela. However, it requires licenses that must be processed before the National Superintendency of Crypto Assets and Related Activities (Sunacrip). The director of DoctorMiner recalled that some of them are: marketing, import of equipment, hosting, operation and technical service.
«Sunacrip has tried to regulate the industry and be an arbitrator before Corpoelec. Progress has been made on the issue of regulations, although we are still in a gray area. In Venezuela they are talking about applying an electricity tariff to the mining industry of half a cent or 1 cent of the dollar for every kilowatt hour, but the tariff scheme is not being applied, “said the director.
Regarding this aspect, our interviewee indicated that it would be developing a pilot plan with electricity rates for miners in Carabobo state, in the center of the country. However, this information has not been officially confirmed.
Toukoumidis acknowledged that police raids of the spaces where the miners operate have decreased, but continue to occur, albeit sporadically. Regarding the announced national mining pool, the executive does not know if agreements have been advanced between the different mining groups that make life in Venezuela.
To know the rest of the opinions of the CEO of Doctorminer you just have to play the video that accompanies this article. As a preview of his reflections, Toukoumidis also addressed the issue of mining pools and what it takes to start such a business.