2024 was an interesting year for Bitcoin mining, marked by the growth of the industry and the launch of highly innovative equipment. However, the year that ends also witnessed the collapse of activity in Latin America, with unforgettable cases in Venezuela and Paraguay, two recognized mining strongholds in the region.
Between both nations, this year more than 20,000 ASIC devices were seized to mine Bitcoin, of different brands, models and power; accompanied by thousands of electrical transformers and other devices necessary to set up mining farms.
The common denominator in both countries was the electrical issue, with the alleged power failures attributed to mining operations in these Latin American nations, which led to scenarios of raids, confiscations and state attacks. against the important digital activity in Venezuela and Paraguay.
Let’s review what happened in these Latin American nations this year, which leaves indelible marks for an incipient industry, but extremely important for the Bitcoin ecosystem:
Venezuela: the electric chase
At the beginning of 2024, earthquakes were reported in the Venezuelan mining industry. The absence of the regulatory entity, called Sunacrip, intervened at the beginning of 2023, plunged mining into regulatory limbo.
Since May, the Venezuelan government implemented various interventions and regulations to restrict mining activity. During that month, NoticiasVE reported that Venezuela would disconnect all Bitcoin mining farms powered by the national electrical system. This was part of an initiative of the Ministry of Electric Energy with the support of the National Electric Corporation (Corpoelec) and the Public Ministry, called the Special Load Control Plan.
In Venezuela, in the voice of the governor of Carabobo, Rafael Lacava, and the Minister of Energy, Jorge Márquez, it was alleged, at that time, that the disconnection of the mining farms was due to high electricity consumptionwhich caused recurring power failures in areas near these facilities.
According to the Ministry of Electric Energy, this measure “will avoid the high impact on demand, allowing us to continue offering an efficient and reliable service to all the Venezuelan people.” Something that has not been fully fulfilled, considering that electrical interruptions continue to be persistent in the states of Venezuela.
As a result of this ordinance, since May Legally operational mining farms began to be raidedwith the consequent confiscation of ASIC equipment. In Carabobo alone, in the center of the country, “thousands and thousands of machines” were confiscated, according to Lacava.
It is officially estimated that More than 10,000 ASIC miners were confiscated for electrical reasons in Venezuela this year and that this equipment remains disconnected and stored in closed warehouses.
Now, to date, no clear plan has been communicated about the future of these devices, while regulatory uncertainty grows due to Sunacrip’s inactivity.
Paraguay: between legality and illegality
In Paraguay, electrical deficiency has also been used as a central argument in the fight against illegal Bitcoin mining, resulting in the confiscation of more than 10,000 ASIC miners, as NoticiasVE has also reported.
The authorities, including the National Electricity Administration (ANDE), the Public Ministry and the Supreme Court of Justice, They have launched an offensive against illegal miners who allegedly benefit from electricity theft.
Since the beginning of the year, the monitoring of these clandestine miners has been rigorous, an issue that has even reached the Paraguayan Parliament, generating both support and rejection within the digital mining industry.
Paraguayan law penalizes illegal mining with up to 10 years in prison. This context has led ANDE to modernize your systems with applications and technologies artificial intelligence (AI) to detect anomalous electricity consumption, indicative of clandestine mining operations.
Recently, ANDE announced a “Master Management and Control Plan for the Reduction of Electrical Losses 2024-2034”, with a goal of reducing electrical losses from 28% to 15%, investing USD 359 million between 2025 and 2028 to improve efficiency and combat energy theft, in part, through digital mining.
NoticiasVE has learned that the Bitcoin miners seized by the Paraguayan authorities They are kept in the offices of the prosecutor’s office or in the custody of the ANDE.. It is estimated that these devices will gradually come under the disposal of the National Secretariat for the Administration of Seized and Confiscated Assets (Senabico), which will decide the final destination of the seized devices.
In parallel with the fight against illegal Bitcoin mining, in Paraguay it was decided this year to increase the electricity rates of Bitcoin miners by up to 16%, as reported by NoticiasVE. A bittersweet situation for industry operators.
In general, 9 mining farms in Paraguay closed as a result of the tariff increase, demonstrating a categorical rejection of the government’s new policy. However, foreign mining companies, such as Hive, have decided to maintain operations, announcing, in November, the installation of 6,500 Bitcoin miners in the country, despite government tariff persecution.
What to expect by 2025?
By 2025, the continuity of Bitcoin mining in Venezuela depends on different factors, among them, clarity about what will happen with the regulatory body, which seems to be still far from being realized.
This is because the Caribbean country is going through a climate of political uncertainty, which raises doubts about the implementation of adequate measures for Bitcoin miners or even about the removal of current restrictions.
So far, Venezuelan authorities have not announced changes or measures for the industry. Instead, silence prevails, which has encouraged clandestine Bitcoin mining. Several mining farms operate secretly in Caracas and other statesfearing government interventions that could result in confiscations.
In the case of Paraguay, there are more and better expectations for the mining industry. This, considering that the advance that the government of that country has carried out, with the support of other State entities, has focused on eliminating illegal or clandestine mining, which takes advantage of electrical energy without paying the country for it. While, in parallel, Investments continue to arrive from mining companies called to operate from Guaraní landwhere mining activity is legal (and pays).
Although the impact of the rate increase plays an important role in how much the Paraguayan mining industry will grow, the arrival of companies like Hive and the expansion of operations of other companies such as Bitfarms, make it clear that the Latin American country may have a clearer horizon for 2025.
Whatever it may be, the future of Bitcoin mining in these Latin American countries remains uncertaindetermined by energy and regulatory policies that are still being developed, and that will show their true faces in the coming 2025.