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Just as Bitcoin’s hash rate recovers to new all-time highs, the network may be in for another massive security boost.
Paraguay’s Senate has passed a bill permitting Bitcoin mining within the country. This may allow the nation to put its massive energy surplus to work, both securing the network and earning Bitcoin.
Mining in Paraguay
Senator Fernando Silva – co-author of the bill “That Regulates Industry and Commercialization of Cryptocurrencies” – announced its passing on Thursday. The legislation should recognize crypto mining as a legitimate industry. It will guarantee access to energy for miners while formalizing its expansion as a sector.
“Regarding transactions with crypto assets, the National Securities Commission will establish the registration requirements for intervening agents for negotiation, compensation, custody, and intermediation in the securities market,” said Silva.
The legislation is now on its way to the chamber of deputies, where the members will further debate it next year. Despite rumors, the bill contains no mention of making Bitcoin legal tender in Paraguay. These arose shortly after El Salvador’s equivalent, but the legitimate announcement at Miami’s Bitcoin conference. The latter’s legal tender law took effect this September.
Paraguay’s mining acceptance is still significant for Bitcoin, however. As the bill reads, the nation could exploit “thousands of megawatts that Paraguay currently has as surplus” of energy. The nation only consumes one-third of the energy it produces, constituting the highest energy surplus in the world.
What’s more is that all of that energy comes from renewable sources. This way, it denies any criticism that Paraguay’s adoption may damage the environment. In May, Tesla stopped accepting car purchases using Bitcoin in response to such fears. However, mining has become significantly greener ever since China ejected the industry from its borders.
The Growth of Bitcoin Mining
Irrespective of Bitcoin’s price movements, mining has surged as an industry throughout this year. Despite China’s ban, the industry has quickly re-emerged in the more eco-friendly Western World. Its hash rate has recently returned to all-time highs.
El Salvador announced its Bitcoin-backed Volcano bond last month. The event marked its most daring experiment with the asset since the Bitcoin law. Now, the country aims to raise $1 billion from investors. Lastly, it will use the funds to invest in Bitcoin and its mining infrastructure. The latter uses geothermal energy from nearby volcanoes.
Decentralization of mining is also seeing progress. In October, Jack Dorsey’s Square (now “Block”) aired possible plans for building a global Bitcoin mining system. This would make mining accessible for everyday people.