Bitcoin
Argentina uses stranded gas to mine Bitcoin with GDA
A YPF Luz worker checking the operation of ASIC bitcoin miners in Neuquén, Argentina.
Genesis Digital Assets
Bitcoin mining operations are expanding across the world. Despite being one of the most competitive industries, hashrate continues to grow and so do global operations to carry out this important activity for the bitcoin network. Genesis Digital Assets Limited, one of the largest Bitcoin miners in the world, is part of this expansion.
GDA announced a major agreement with YPF Luz, a subsidiary of Argentina’s largest electricity company, YPF, to open a new bitcoin mining facility that will operate on stranded gas. According to the CEO of YPF Luz, Martín Mandarano, the company has been generating electricity from mining since 2022, the local newspaper Scope reported.
The operation is based at the Bajo del Toro Thermoelectric Power Plant, operated by YPF Luz. It will power 1,200 bitcoin mining machines to monetize stranded gas that would otherwise be released into the atmosphere. This is the first time that the company has opened a mining operation in Latin America, specifically in Rincón de Los Sauces, in the province of Neuquén, with a total capacity of 7 MW and 1 MW backup.
“While we have been considering expansion into Argentina for years, the political and pro-innovation climate that the country has fostered for crypto – and specifically Bitcoin – has never been stronger than it is today. There is also a large percentage of the population in Argentina that already uses cryptocurrencies and stablecoins to protect against high inflation. The bottom line is that crypto is a solution to these problems, and we are seeing this fact recognized by countries across Central and South America,” the president explained to me. GDA executive Abdumalik Mirakhmedov an interview.
The new facility showcases two important elements of bitcoin mining’s potential. On the one hand, it helps mitigate the direct impact of stranded gas on the environment. However, other mitigation techniques do not include the second element: using these wasted resources to obtain some valuable return, in this case, through BTC. What is most significant in terms of scalability of this type of initiative is that it will not compromise the electricity needed to cover Argentina’s domestic demand.
While Latin America has not traditionally been a major bitcoin mining hub, GDA’s new facilities in Argentina signal an important shift. Paraguay, Venezuela and now Argentina could lead the charge. The company sees Argentina as an ideal starting point for its regional expansion, citing the country’s favorable combination of characteristics. This change could pave the way for greater industry growth in the region, with the expansion of other operators.
“We are actively looking for more countries in the region to expand, but we are currently focused on Argentina because it offers the ideal combination of attractive electricity prices, temperature, development potential and sustainable energy sources,” said Mirakhmedov.
Since Javier Milei took power in late 2023, the Argentine bitcoin and crypto industry has been on the move. The public sector is trying to regulate activity to further comply with Financial Action Task Force recommendations and International Monetary Fund requirements, while companies, startups and users look for ways to keep adoption growing.
It is unclear how this regulatory issue will be resolved, but the GDA’s announcement highlights the importance this country could have for the industry, especially for bitcoin miners.