“The Adventures of Miners”: My unforgettable experience of investigating Bitcoin mines in Paraguay

Since the full implementation of the 519 policy, we have experienced a period of comprehensive “downtime” that is not short-lived.

During this period, our team has been conducting a review from beginning to end in order to make decisions that no one will regret in the future. With the successive introduction of policies in Inner Mongolia, Xinjiang and Yunnan, the Sichuan policy also took effect on June 18. And our mining machine, a little bit lucky, is in Sichuan. The first policy of other regions gave us a short buffer period of one month and gradually sought solutions.

"The Adventures of Miners": My unforgettable experience of investigating Bitcoin mines in Paraguay

Since we heard the wind, which may be as early as May 19, we have begun to study countermeasures. Repeatedly researching and discussing possible future ways throughout the day, formulating a plan, overthrowing it, and formulating it again. During the period, I didn’t think about giving up and completely selling this pile of “broken copper and rotten iron”.

But in the final analysis, I am still not reconciled.

Think about the roads that I ran, I flew to Sichuan, the peppers I ate, the sweat left behind, and the efforts of the whole team for inspections. After more than three years of living together and advancing side by side, I really can’t bear to let it go. .

In a very unexpected opportunity, we contacted a Chinese friend who had been a miner in Paraguay, South America for several years on the Internet. In order to communicate more aspects and to be able to truly understand the situation of the other party, we communicated and conducted the first video call through WeChat two weeks after the shutdown was announced in Sichuan.

On the same day, I specifically explained that many people in the group will join the online participation, so that everyone can work together to make better suggestions. When he had a video call with this friend for the first time, he comprehensively analyzed the current Bitcoin mining market share distribution, and further compared the advantages and disadvantages of various alternative destinations.

Of course, I can only sort out and share the following narrative according to what can be recalled.

According to this friend’s analysis, China is the world’s largest bitcoin mining company, accounting for about 70%, followed by the United States. Miners generally choose places with cheap electricity prices and abundant site resources. According to the past overseas mining layout, North America, Russia, and Central Asia have become the preferred destinations for most of the miners going to sea.

However, as many countries have become increasingly strict with Bitcoin mining policies, can they go to sea or where to go? This is the real problem before us.

According to the further analysis of this miner friend, Kyrgyzstan, where the cost of electricity resources is relatively low at the moment, the National Security Council of the country discovered a hidden large illegal mine in a private house, and raided and confiscated 118 Bitcoin mining machines. . The authorities stated that large-scale Bitcoin mining has caused huge damage to the country’s power grid, and there has been a wave of power shortages. Therefore, this is also a policy risk similar to force majeure.

Iran has also released relevant policies recently. 

Iran’s state-owned power generation, distribution and transmission company Tavanir issued a warning about the entry of Chinese cryptocurrency miners into Iran and banned Bitcoin mining that consumes electricity resources.

Russia, which originally has a suitable climate and temperature and is absolutely abundant in thermal power resources, faces China’s strong regulatory measures. Russia’s policies are almost the same as China’s, and the resources used for mining are not clean energy. This is in response to the country’s global energy conservation and environmental protection policies. Some violations, so Russia is not the preferred place.

In addition to the current policy momentum, if you really want to consider the overall export of mining machines to the sea, you must also consider factors such as equipment tariffs and freight costs.

Finally, Paraguay is mentioned. According to Bitcoin Magazine, as many as eight Chinese Bitcoin mining companies are planning to move their operations to Paraguay. Juanjo Benítez Rickmann, CEO of Paraguayan mining company Digital Assets SA, stated that one of the companies is installing 90,000 Bitcoin mining equipment.

In addition, some Chinese companies have already got in touch with friends of Paraguayan miners.

As far as Paraguay is concerned, there are several advantages that have to be mentioned, that is, Paraguay’s policy on Bitcoin mining is relatively loose, electricity prices are relatively cheap, and it is also one of the countries that have publicly stated that they support Bitcoin mining.

However, in the horizontal comparison in South America, there is another country, Argentina, because of the government subsidies, the electricity fee is very cheap, and the mining population is very good, and some miners have settled in. However, Argentina has extremely strict control over equipment imports, and the country’s inflation is very high, so it is not the best choice to go overseas.

If it is a large-scale mining company going overseas, in addition to the aforementioned issues of whether national policies allow, whether energy is sufficient, electricity prices and tariff transportation costs, etc., the site must also be considered. Self-built mines need to communicate whether there is a site to support the construction. The period of self-built mines in North America is relatively long.

In general, the situation in Kazakhstan, Paraguay, and the United States is relatively suitable, and the popularity of South America is also quietly increasing. Coupled with the news that Paraguay is about to legislate to make Bitcoin a legal currency in the country, it seems that our team has found the right direction.

After this video conference, based on his understanding and professionalism of the entire currency circle, this convinced me. But the team and I still held back the joy in our hearts. After all, if we talk about establishing a cooperative relationship, the other party will benefit, and I know that there are no people who don’t want to benefit. We are more looking forward to seeing a relatively well-formed proposal before we make a final decision. To be honest, the size of the team is not too small.

In the end, after several discussions, I quickly made a decision: I should go to Paraguay for a field visit.

When this idea first came up, I also had a lot of worries. After all, during the current epidemic, no one can guarantee absolute safety for long-distance flights to Paraguay.

But in the end, after several trade-offs and discussions, I decided to fly by myself.

At the moment when I made the decision, I told my friends of the Paraguayan miners that I had been in contact with. He said that he was very welcome, and if we were to go for the inspection, he would arrange the time for the whole process and pick us up properly. After the decision is made, we will prepare visas, book air tickets, and prepare anti-epidemic supplies to wait for departure~

According to the strategy that I studied in advance, I decided to go to Istanbul as the first stop in terms of route selection. I traveled in June. After I arrived in Istanbul, I had completed the vaccination. I did not prepare a nucleic acid test report and did not require compulsory isolation of travelers from China, which means that I can be exempted from isolation.

After doing some sorting in Istanbul, I embarked on a flight to Sao Paulo, Brazil. On the way, the mood is disturbed. South America is a completely unfamiliar land to me, and there is nothing in my mind except for the statue of Jesus.

After staying here for only two days, I came to Asuncion through a connecting flight. This is Paraguay, the capital city of South America.

As soon as I got off the plane, I saw an old miner friend in Paraguay. The first impression was that he was very enthusiastic and straightforward, because he said that he could directly call his grandson, and everything can be handed over to him during this period of time here. The itinerary is fully arranged, just waiting for us to arrive.

On the way our SUV left the airport, Lao Sun began to introduce me to the city.  

After his explanation, I realized that Asuncion was not large in size. But there is actually a school that teaches Chinese here, and he also said that he can take us to visit it. Since I was focused on the future destiny of the mining machine, I just smiled and said thank you when I heard his arrangement.

When he finally said “here”, I looked out the window of the hotel where I was about to stay. The appearance of the hotel looks very similar to some European-style buildings, but I can’t tell the specific difference.  

After checking in, I always feel relieved. However, a boulder in my heart still did not let go. On the next day, under the leadership of Lao Sun, I started an inspection activity to “integrate” into the local miner circle. During this period, it is basically possible to meet and communicate with some local professional mines or miners engaged in mining every 2-3 days.

Of course, under the leadership of Lao Sun, I have tasted some local special foods, coffee and special teas that make people’s lips and teeth fragrant~

In general, I got in touch with some local miners and learned about some of the main local cooperation methods in Paraguay, which was also confirmed by Lao Sun. The mode of mining locally can mainly adopt the hosting mode or the cooperative operation mode. The choice depends on the size of the mine.

First, the hosting model.  This mode is suitable for small mining operations. The mine will provide the corresponding licenses, and there will be dedicated maintenance personnel who are responsible for the daily maintenance and security of the mining machine, and are responsible for arranging the entrusting party to handle the entry documents of the personnel. After the entrusting party signs the agreement, it only needs to pay the fees for handling the documents and custody of the immigration personnel.

Secondly, the cooperative operation model is suitable for large-scale mining enterprises.  

The local company will assist in handling relevant licenses, site selection of the mine, and entry documents of the corresponding miners, and provide a full set of security services for the mine. In terms of distribution, this model adopts a model of cooperation in which both parties invest in a certain proportion of shares.

After getting acquainted with these basic market conditions, local miners also confirmed some increasingly positive news, and the Paraguayan Congressmen formally submitted a legislative proposal for the Bitcoin Law. It will pass smoothly soon. This is undoubtedly a piece of good news that will encourage me and the team to make quick decisions.

Under the coordination of Lao Sun, we also visited the hydropower station. The visit to the hydropower station also reminded me of looking for a suitable power station in Sichuan in China. Fortunately, Lao Sun was very familiar with the local area and went well along the way.

When I visited the hydropower station, there was another piece of information that surprised me. When I heard about the local electricity bill, I couldn’t hold back the joy. It was too cheap—one kilowatt-hour of electricity cost only two cents! This is simply too cost-effective for mining machines that consume a lot of energy and cost.

In the end, under the premise of understanding the local market, and with the help of Lao Sun, he learned some of the provisions in the latest legislation from a local mine, which confirmed that Paraguay pays more attention to supervision and supports miners. This made my heart that had been hanging a little calmer.

During the inspection, one thing to thank Lao Sun in particular was that in order to take care of my Chinese stomach, he did not spend less time preparing the ingredients and preparing the long-lost Chinese meal.

Just one day when my trip was about to end, Lao Sun told me another piece of good news. An institution he had hosted before has accepted his plan, and will officially start the formalities soon to ship their beloved precious mining machine to Paraguay.

On my return journey, I made a detour from Panama and then flew back to Istanbul. Along the way, my thoughts have been in a floating state, the kind of excitement. When I got off the plane, I basically sorted out the conclusions of the inspection, and negotiated with the team to arrange a video conference for the final decision-making discussion.

Once I accept my decision, I believe that soon our mining machines can also play their light and heat in Paraguay, South America! The conclusion of everything is to do as much as you want. Everything you do has a turn for the better. After all, it’s better to go out to sea than to sell it at a low price.


Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/the-adventures-of-miners-my-unforgettable-experience-of-investigating-bitcoin-mines-in-paraguay/
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