Text: Nicolás Cassese // Photos: Aníbal Greco // Special EnvoysRÍO GRANDE, Tierra del Fuego.- Just an algorithm, a set of rules that allow solving a problem, conceived by someone who calls himself Satoshi Nakamoto, holds a currency that avoids those dirty bills, the maximum symbol of the oppressive past of governments and banks .This is how the anarcho-libertarian universe behind cryptocurrencies perceives itself.A world of pure and digital souls, without the original sin that is born with matter.However, here, in the last corner of the planet colonized by man, a territory of shipwrecks and explorers, cryptocurrencies are something very concrete and tangible.There are 1,800 machines working tirelessly in a 2,700 m2 warehouse on the outskirts of the industrial and soulless steppe of Rio Grande.They are also a humbler version of the same business: 20 old and buzzing machines, abandoned in a garage full of discarded rally cars, one of the sports with which the locals face the winter tedium.And they are, finally and according to the provincial government, the culprits of the lack of energy that obstructs the growth of this province.Like beavers, cryptocurrencies, say their detractors, have become too widespread in Tierra del Fuego.A triple benefit – cold weather, industrial promotion law and subsidized energy – protected its development.Will it be time to regulate them?In addition to a serious local problem, the tensions faced by the ecosystem in Tierra del Fuego – converted into an unusual capital of cryptocurrency mining – are an exaggerated example of the limits that the scheme of new currencies is running into throughout the world. world.Secret "The secret is to cool the machines," reveals Miguel Camaño, a 63-year-old from Buenos Aires who left Pompeya four decades ago and settled in Río Grande to work in the then-nascent appliance industry.Today he is the plant manager of Cryptopatagonia, one of the two large companies that changed part of his profile.The same shed that until four years ago made – or assembled, according to industry critics – household appliances for Athuel, the Liberman family company, today is occupied by the machines that produce cryptocurrencies.Mining cryptos, as they say in the jargon, is putting the processing power of computers to solve an algorithm whose reward is a cryptocurrency, or a part of it.The investment to set up the business was, according to the figures of Leandro Liberman, partner of Cryptopatagonia, of 10 million dollars.Tierra del Fuego, the most inhospitable and isolated of the Argentine provinces – to come by land you have to cross into Chile before re-entering Argentine territory – added a new activity to its productive profile.Along with nature tourism and the assembly of household appliances and cell phones, there is now a cryptocurrency mining boom.Even at times like the current one, when the price of cryptos collapses, the activity prospers and adds new players.Bitpatagonia, installed in two plants, one in Río Grande and the other in Ushuaia, where Newsan, Rubén Cherñajovsky's company, assembled cell phones, is the second of the large companies dedicated to the subject in the province.The industry is opaque, unwilling to show their numbers and their facilities, except when they have an advertisement to broadcast.The tour of the Cryptopatagonia facilities carried out by LA NACION is an exception to the rule.It is even difficult to find out how many companies in the sector there are in Argentina.The other news in the sector is that Bitfarm, an industry giant founded by two Argentines, with eight cryptocurrency farms in North America and one in Paraguay, is setting up an operation in Río Cuarto, Córdoba, which it plans to have ready before the end. of year.But not much else is known."Sometimes I feel that we are drug traffickers," a businessman in the field is honest.There are also many private companies that install their equipment in the laundry room of their home or in vacant offices.In Río Grande there are dozens of small SMEs and individuals who set up their mining operations in the most unlikely spaces.From chemical toilets to unfinished homes and overcrowded garages, every nook and cranny serves as a hub for miracle machines, generating wealth and demanding nothing more, and nothing less, than energy.Dilemma.A province with energy deficienciesTriple benefit The reason behind this boom is the triple benefit that the province grants.One is natural and stable: cold, which makes machine performance more efficient.The other two are the decision of the politicians and can be modified: the industrial promotion law, which cuts the expenses of the companies that settle in the area, and the subsidy to the energy rate.These last two advantages are in the spotlight.Cryptocurrency mining operations have become too successful and consume 20% of all the energy available to a province with huge electricity supply problems.The three power plants that produce energy using gas in Tierra del Fuego are old, almost obsolete, and are not connected to each other, nor to the national system.Río Grande and Ushuaia, the main cities of this island populated by only about 150,000 brave people who are encouraged by the cold, can only consume the energy generated by their power plants.And the demand from crypto miners is restricting the growth possibilities of new neighborhoods and other industries.The industrial promotion law is the one that is most questioned in its application to crypto mining.Sanctioned in 1972, it establishes tax and tariff benefits to encourage the establishment of technology industries and residents in Tierra del Fuego, a territory that at that time was in dispute with Chile.The problem is that, 50 years later, its costs in lost tax collection and, above all, in higher prices for electronic products for Argentine consumers due to import restrictions generate suspicion.The question is whether the benefit of the law is for the province and the development of the industry, or for the businessmen who set up their factories sheltered by protection.During the government of Mauricio Macri there were some tepid attempts to question the industrial promotion regime.But the opposition coalition itself has conflicting positions.In May of this year, María Eugenia Vidal traveled to the province and uploaded a photo of her to the networks in the uniform of Migor, one of the companies benefited by the law.Migor was founded by Nicolás Caputo, a close friend of Macri.Among the ruling party, on the other hand, there were no relevant gestures or statements to question the benefits.In the provincial government they do agree that it makes no sense for cryptocurrency mining to operate with subsidized energy while there is a shortage for the rest of the activities.The province has just multiplied by more than ten the electricity rate paid by mining companies.The kilowatt per hour (kWh) went from $0.8 to $11.“Mining is taking a lot of energy and we have to take care of it,” says Moisés Solorza, Tierra del Fuego's Secretary of Energy.His position is that crypto mining should not be banned – as has already happened in China – but it should be regulated.“The State does not have to subsidize them.If they don't like the new rate, let them generate their own energy”, he launches.Cryptopatagonia advances in a plan in this sense: it has a project to produce its own energy with gas-powered turbines.Miniature Show Tierra del Fuego is a miniature show of the problems facing crypto around the world.According to a study by the University of Cambridge, bitcoin mining, the most popular of cryptos, consumes the same energy as all of Argentina.There are other cryptocurrencies that are less demanding, but their scale and penetration do not compare to that of bitcoin.Such energy voracity triggers two obvious questions.The first is why bitcoin consumes so much and the second is if that consumption is justified.To answer these questions, it is necessary to delve into the complex system that sustains its operation.Lacking an institution that guarantees transactions – a government or a bank – the bitcoin network is supported by a decentralized system in which computers connected to the network in different parts of the world certify the validity of an exchange.As a reward, the owners of those computers (the miners) receive payments in bitcoins, or in parts of bitcoins.To maintain the value of the coin, a limit was set on how many bitcoins will be issued: 21 million.Becoming a rare commodity, miners compete by solving algorithms to see who validates transactions and keeps the prize bitcoin.The problems to be solved become more complex as new competitors join the network, so the computers must increase their processing capacity.The consequence of this process is an increasingly high demand for energy, which is the input with which the machines work."The environmental lobby against bitcoin is going to grow," concedes Santiago Siri.The argument of bitcoiners, says the digital entrepreneur, is that such a level of energy consumption is the cost they have to pay to defend themselves against attacks from states, banks or other enemies of the new order that cryptocurrencies represent: the price of freedom.“I think there is some truth to that argument,” says Siri.Critics, on the other hand, say it's pure waste.An arms race with no other justification than to seize the value generated by a scarce good.Another argument for the defense of bitcoin is that it encourages the development of renewable energies, but the subsidies of Tierra del Fuego, even after the increase in the rate, distort the incentives and encourage the consumption of traditional energy.Increase “The increase in fees hit us hard,” fires one of the big players in crypto mining who, like many of his colleagues, does not want to divulge his name and accuses the provincial government of not regulating cryptocurrencies. private.“In Tierra del Fuego they are all mining.In garages, apartments, villas.The problem is them, not us, ”he launches.The accusation points directly to Paulino Rossi, the great promoter of the small mining farms in the province.Former civil servant, lawyer, accountant, owner of a car agency and connoisseur of everything that happens in his city with the soul of a town –Río Grande–, Rossi found himself with too much free time in the pandemic and began to read about the world of cryptos.Thus, he discovered that his province had climatic and regulatory advantages and founded SouthMining Capital, a company that installs and operates crypto mining equipment for private and small companies.Together with his brother Emmanuel and three technicians, they manage the operation for some 500 clients.They have machines distributed throughout the Rio Grande, in sheds, half-built houses and offices.They sell the equipment and also offer to install and manage it on their own farms.In exchange for 26% of the profit, a client from a city less subsidized by climate, or taxes, outsources the installation and management of his mining equipment to Rossi's company.The minimum initial investment is about $4,000 and, according to Rossi's figures, today it yields about $140 a month.Very far from the 900 dollars that this investment delivered at the best moment of the cryptos.Since November of last year, when it reached its peak, bitcoin has lost more than a third of its value."It's a very volatile business and you should never invest more than 15 or 20% of your savings," Rossi warns.He seems comfortable with the uncertainty of his new venture.It is in his blood: in 1982, his father drove five days from Córdoba with the whole family to settle in Tierra del Fuego.The adventurous spirit runs through all the actors in the sector.Pablo Pruvost, for example, is a Banco Nación teller who installed two mining equipment among the remains of a quadricycle and a chulengo that invaded his garage on the outskirts of Río Grande.“I invested $18,000 and I have no idea about technology, but I trust Paulino,” he says.Miguel Camaño himself, who now runs the Cryptopatagonia operation, knew nothing about cryptocurrencies when the Libermans called him four years ago to take charge of their new business unit.He googled, watched YouTube videos of Russians already setting up mining operations, and took the plunge."Don't worry, we don't know too much either," he says his new bosses told him.Just try to make a little mistake.There is a lot of money at stake."According to the criteria ofCopyright 2022 - SA THE NATION |All rights reservedDownload the application of LA NACION.It is fast and light.Do you want to receive alert notifications?A connection error has occurred