Quick Facts
Hive Cryptocurrency Mining Firm Secures Low-Cost Energy Deal with Paraguayan Partner
As the cryptocurrency landscape continues to evolve, Bitcoin miners are exploring new opportunities to remain competitive in the market. One such miner, Hive Digital Technologies, has made a significant move by partnering with Paraguay for low-cost energy, a decision that could pay dividends for the company and the entire cryptocurrency industry.
A Perfect Storm for Cryptocurrency Mining
Paraguay, located in the heart of South America, offers a perfect storm of conditions for cryptocurrency mining. The country boasts geopolitical stability, low-cost hydro energy, and a government open to foreign investment. These conditions are particularly attractive to Bitcoin miners like Hive, who are seeking to reduce their operating expenses and increase their profit margins.
Hive’s Entry into Paraguay
Hive Digital Technologies, a Canadian-based company, has been actively exploring opportunities in Paraguay for some time. In January, the company acquired Bitfarms’ 200-megawatt (MW) Yguazú facility in Paraguay for $56 million. The facility, which has a capacity of 100 MW, has already been completed, and Hive plans to expand it to 300 MW by 2025. The initial phase of the facility has been designed to support five exahashes per second (EH/s) of application-specific integrated circuit (ASIC) mining.
Scaling Up Operations
Hive’s expansion plans in Paraguay are ambitious, with the company aiming to increase its hashrate to 25 EH/s by September. To achieve this, the company has locked in key ASIC orders, secured long-term power purchase agreements, and expanded its engineering capacity across three continents. These strategic moves aim to mitigate the impact of market and technological uncertainties on the company’s operations.
Creating a Local Ecosystem
Hive is committed to creating a local ecosystem in Paraguay that supports its operations. The company has spent over a year cultivating strong relationships with local stakeholders, including local hiring, training programs, and vendor partnerships. By doing so, Hive aims to create a stable and efficient mining environment that minimizes costs and maximizes uptime.
Addressing Geopolitical Risks
The cryptocurrency industry is not immune to geopolitical risks, and Hive is taking proactive steps to mitigate these risks. The company is diversifying its presence in North and South America, creating a balanced footprint that is resilient to geopolitical or trade policy shocks. Additionally, Hive has diversified its sourcing channels for ASICs and electrical components to avoid single-region dependencies.
Profitability in Bitcoin Mining
Bitcoin mining profitability is often viewed as a complex equation, and Hive’s president and CEO, Aydin Kilic, agrees. In an exclusive interview with Cointelegraph, Kilic emphasized that profitability in Bitcoin mining ultimately comes down to a physics equation. Capital and operational expenses depend on hashrate-sensitive analysis, and the focus should be on controlling inputs such as opex, power costs, and machine uptime to drive predictable outputs.
Lessons for the Industry
Hive’s partnership with Paraguay and its commitment to creating a local ecosystem offer valuable lessons for the entire cryptocurrency industry. The company’s focus on reducing costs, increasing efficiency, and diversifying its presence demonstrates a deep understanding of the challenges facing the industry.
