The Paraguayan legislature is urgently pushing a bill that, if passed, could mean up to a decade behind bars for illegal Bitcoin miners due to the large amount of electricity pilferage jeopardizing the state-backed National Electricity Administration.
The proposed legislation enables Paraguayan law enforcement and legal officials to confiscate and auction off mining machines from unlawful operations to safeguard ANDE from energy theft, which results in substantial financial damage. Despite this crackdown, authorities have already seized over 5,000 ASIC miners this year alone. Additionally, lawmakers are also speculating on imposing a brief ban on all Bitcoin mining in the country to curb further energy exploitation.
The proposed regulation, which has been instituted by overseers, aims to safeguard consumers from the risks linked to digital assets. The bill must pass through three stages in Congress before it reaches the president’s desk.
Paraguay, renowned for its appeal to Bitcoin miners, has nearly 100 percent hydroelectric ability and runs two large binational hydroelectric dams with Brazil (Itaipu) and Argentina (Yacyreta). These eco-friendly sources are of great interest to Bitcoin miners because of their cost-effective electricity and recognition of the growing importance of renewable energies.
According to the United Nations Development Programme, Paraguay and Albania have the world’s cleanest electric power manufacturing. However, the approval of the new regulation carries the risk of forfeiting the potential for Bitcoin miners, potentially impacting cryptocurrency end users across the nation.
The proposed legislation, if passed, would drastically alter the framework governing the 50 firms that mine for resources under an agreement with the nation’s Department of Energy. The extent of these agreements varies considerably, covering operations that generate between 6 and 100 megawatts.
Analysts are concerned about how the planned prohibition will affect all individuals in Paraguay who trade in digital currencies, as it would restrict them from dealing and owning these digital assets. Further, the largest mining cooperatives argued that the law could eliminate hundreds of local jobs and significantly decrease domestic energy consumption. However, others believe some short-term disruptions may be unavoidable and necessary to establish prudent regulations for emerging technologies.
The electricity consumption of cryptocurrency networks has repeatedly caused governments to be concerned about rising energy costs. Moving forward, more efficient mining methods are paramount to adopt. RMI prioritizes reducing carbon emissions associated with cryptocurrencies by improving electricity sources rather than modifying transactions.
Bitcoin alone uses over 127 terawatt-hours per year, surpassing entire countries like Norway. Cryptocurrency operations in the US emit 25 to 50 million tons of carbon dioxide per year, equal to diesel exhaust from railroad transportation. Shifting the industry’s focus towards renewable energy sources is imperative to guarantee environmental sustainability.