- Political and economic instability has stimulated crypto mining in Argentina and general market adaptation
- A Miner in Buenos Aires is maintaining an updated mining operation while enduring elevated risks
- Argentines remain hopeful for crypto as a form of liberty during economic turmoil in 2020
Crypto adaptation in Argentina
Argentina, a country full of pride and culture, has been plagued by multiple economic and financial crises in the last 3 decades. As Argentina’s currency, the Argentine peso has been devalued against the US dollar by 7000% since 2000. The fiat currency has ceased to be a sustainable store of value.
Due to excessive taxing and labor regulations, many employers push to keep employees ‘under the table’. Consequently, Argentina has a high rate of financial exclusion with less than 50% of the population holding a valid bank account.
Argentine citizens are adapting to Bitcoin and other cryptocurrencies in response to their country’s condition. This adaptation has seen a steady rise of miners spread throughout the country.
While miners in Argentina were initially hobbyists in Buenos Aires playing with digital money. The argentine landscape for miners has become much more professional in the past few years.
Today, few miners use GPU rigs or outdated ASICs. The few remaining small-time hobbyists are mining for fun or have an energy subsidy with reduced electricity costs.
Deep dive with Argentine miner in Buenos Aires
The editors of Hashpowah take a deep dive into crypto mining in Argentina with Marcelo Flores. He has been mining for over 7 years and currently runs XCAP, a wealth management fund that specializes in Bitcoin and other cryptocurrencies.
Marcelo’s rig portfolio consists mostly of Bitmain machines. Although he has recently updated to S17s and has a few S9s mining. However, Marcelo expects his S9’s to no longer be profitable for him after the upcoming reward halving in May, 2020.
He is hopeful for the upcoming S19’s cost efficiency, but has concerns on the centralization of Bitmain’s influence in the mining industry. He is a decentralized crypto purist but also acknowledges that Bitmain produces efficient rigs.
“Mining has always interested me because of the technical challenge and the beauty of having metal slaves working, processing blocks on various cryptos, and receiving recompensation for their work. It hasn’t been all sunshine and roses, though, as the continuous dependence on mining difficulty, market value, and getting the machines to keep working can be straining.” – Marcelo Flores, Founder & CEO at XCAP.
Political instability, COVID-19, and hope in Crypto
Political instability and economic crises such as COVID-19 increase the risk for miners significantly. For miners like Marcelo, this adds challenges to how to maintain a profitable operation and does not help short and medium-term prospects for miners.
Despite these challenges, miners in South America see economic turmoil as an opportunity for cryptocurrencies to grow. As adaptation, market confidence, and practical usability increases, miners see a means of fiscal liberty from their surrounding problems.
Governments are introducing extreme measures of quantitative easing. Paired with the Bitcoin reward halving, essentially the opposite of quantitative easing, and upcoming Marcelo expects adaptation to cryptocurrencies to increase overall in 2020.
Written by Timoteo Turrin – Hashpowah editor & Economist
Nate Christenson – Hashpowah editor & eCommerce Product Manager