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In summary
- Hive Digital acquired 13,480 Mining machines for more than $60 million to expand its operation in Paraguay and secure 2% of the global Bitcoin network.
- The new machines, Bitmain Antminer S21+ Hydros, offer a capacity of 4.3 exahashes per second, with the option to expand up to 8.6 EH/s.
- Paraguay is an attractive country for Hive due to its green energy and low prices, in addition to pro-business policies.
Canadian Bitcoin mining giant Hive Digital is betting big on Paraguay.
The public company – which is listed on both the Toronto Stock Exchange and the Nasdaq – announced this Tuesday the purchase of 13,480 units of new mining machines to expand its operations in the South American country.
Priced at over $60 million, the deal will help it secure 2% of the global Bitcoin network. The machines—Bitmain Antminer S21+ Hydros—provide a hash rate capacity of 4.3 exahashes per second (EH/s). An exahash is a measure of the processing power of a Bitcoin mining machine.
The company also secured an option to purchase an additional 4.3 EH/s of the same model, exercisable within a year. If the option is fully exercised, then Hive’s mining fleet could expand to 8.6 EH/s — and it hopes to reach a mining hash rate of 15 EH/s by summer 2025.
Chief Executive Frank Holmes said that once fully implemented, the expansion to 15 EH/s would “propel Hive to over $300 million in annualized revenue and deliver over $200 million in mining margin, based on current mining economics.”
Why Paraguay? Hive has been evaluating the opportunity for years. In 2022, the miner met with President Santiago Peña for a 100 megawatt operation using green energy from the Itaipú hydroelectric dam. The site is still under development.
Holmes told Decrypt that in addition to having abundant green energy, Paraguay’s government was “pro-business” and low-tax.
He also said the deal benefited the government: Instead of selling their cheap electricity to neighboring Argentina, they could sell it to Hive for their mining operation and receive dollars — thereby serving as a hedge against inflation.
“They sell electricity to Argentina for a cent, and there is slow payment or no payment,” he said. “And here, with us, they receive the money every month. They receive US dollars. So while the other currencies have been declining, it is a built-in hedge, and their banks cannot hedge their currency against the US dollar.”
“Here we are helping Latin American countries to earn foreign currency in a stable manner,” he added.
In the world of Bitcoin, miners are necessary to keep the network running and mint new digital currencies. Such operations now typically consist of huge warehouses filled with expensive custom-built machines, making mining an expensive and competitive endeavor.
Bitcoin miners are increasingly attracted to Paraguay for its cheap, green electricity — and lawmakers want to make it a hub of the crypto ecosystem.
President Peña previously said he wants the country — which borders Brazil, Argentina and Bolivia — to be a technology hub and an “integration center” between Latin America and the rest of the world.
Edited by Andrew Hayward
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