Argentina - The state energy firm launched an experiment with Bitcoin mining
YPF is selling electricity to a private miner in the Vaca Muerta region, where natural gas is abundant.
Argentina’s state-run energy firm YPF said on 2 October that it was supplying electricity to a private Bitcoin miner in the south of the country. This is where the Vaca Muerta oil & gas patch is located, and YPF uses gas to fire thermal power plants there. The contract is set up through the firm’s power unit, YPF Luz.
This is a small electricity supply contract. It is a pilot project that will take 1MW in generation from YPF. Later in the year, the firm expects to supply 8MW to the miner. Canadian Bitfarms is building out mining infrastructure at a 210MW thermal facility in northern Cordoba province.
Bitfarms formed in 2017 when a Tel Aviv-listed firm called Natural Resources Holding merged with Quebec-based Backbone Hosting Solutions by acquiring 75% of Backbone’s shares. Israeli-Canadian entrepreneur Roy Sebag founded Natural Resources Holdings and was blocked by Israeli regulators when the company pivoted into blockchain technology.
This first Argentine pilot is equivalent in capacity to the El Salvador pilot that has been set up at the state-owned electricity geothermal company LaGEO’s Berlin facility in Usulutan. Part of El Salvador’s initiative to bring capital into El Salvador through its Bitcoin policy involves building out geothermal wells and infrastructure at Berlín.
It is somewhat unsurprising that YPF wants to supply electricity to power-hungry Bitcoin miners. What is interesting, however, are two things. First, the move does not seem to be politicized in the same way that Bukele leveraged LaGEO and geothermal to attract investment and boost his popularity. This seems like an institutional pilot through YPF without any signs of it being part of a national political agenda. That’s good.
The second thing is the fact that Argentina’s tax authority has been raiding miners in the past several months. That means that the state is elbowing out small, informal Bitcoin mining operations in favor of accommodating larger mining companies that pay fixed contracts to the state energy supplier - and are more likely to pay their taxes, not dodge them.