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Should Paraguay invest its energy wealth in Bitcoin mining or fighting poverty?
- gus_massa 8y agoThe article assumes that mining Bitcoins and fighting poverty are incompatible. They have an excess of cheap electricity, and they don't know what to do with it. (And a bad electric grid.) A good trick is to build a aluminum smelter because it use a lot of electricity. [In Argentina we have Aluar https://en.wikipedia.org/wiki/Aluar https://en.wikipedia.org/wiki/Aluar They essentially have their own hydroelectric dam.] But for an aluminum smelter you need a lot of inversion, it uses some toxic material, and you need good fluvial communication (they probably have this part). It's not easy to build an aluminum smelter. Another possibility is to mine Bitcoins. It needs a lower amount of inversion, and it has less logistic problems because you don't need a giant port to receive the bauxite and send the refined aluminum. What is the difference between Aluminum and Bitcoins? You don't care is someone is willing to pay for it! (If you are a cryptoskeptic (like me), you can think that the Aluminium will be valuable for a longer time than the Bitcoins. But it is not important if you sell the production now.) The solution for the poverty is to raise the prize of he electricity and use the additional money to diversify the industry in case Bitcoins implodes. (I doubt that the government plans are the best way to invest the money, anyway.) You can add some tax to the mined bitcoins, but it's almost imposible to check. So everyone will just not pay the tax. It's easier to raise the price of the electricity and perhaps add a discount for family houses small industries or whatever you like.