Argentina Uses Stranded Gas to Mine Bitcoin with GDA

Bitcoin mining operations are expanding around the world. Despite being one of the most competitive industries, hashrate keeps growing and so do the global operations to execute this important activity for the bitcoin network. Genesis Digital Assets Limited, one of the largest Bitcoin mining companies in the world, is part of this expansion.

GDA announced an important agreement with the YPF Luz, a subsidiary of the largest electricity company from Argentina, YPF to open a new bitcoin mining facility that will operate using stranded gas. According to YPF Luz CEO Martín Mandarano, the company has been generating electricity from mining since 2022, the local newspaper Ambito reported.

The operation is based in the Bajo del Toro Thermal Power Plant, operated by YPF Luz. It will power 1,200 bitcoin mining machines to monetize stranded gas that would otherwise be flared into the atmosphere. This is the first time the company has opened a mining operation in Latin America, specifically in Rincón de Los Sauces, in the Neuquén Province, with a total capacity of 7 MW and 1 MW backup.

“Although we’ve been considering expanding to Argentina for years, the political and pro-innovation climate the country has fostered for crypto – and Bitcoin specifically – has never been stronger than today. There’s also a large percentage of the population in Argentina that already uses cryptocurrencies and stablecoins to hedge against high inflation. The bottom line is that crypto is a solution to these problems, and we’re seeing that fact recognized by countries throughout Central and South America,” Executive President of GDA Abdumalik Mirakhmedov explained to me in an interview.

The new facility showcases two important elements of bitcoin mining’s potential. On one hand, it helps mitigate the direct impact of stranded gas on the environment. However, other mitigation techniques don’t include the second element: using these wasted resources to make some valuable return, in this case, through BTC. What is more significant in terms of the scalability of this kind of initiative is that it won’t compromise the electricity needed to cover Argentina’s internal demand.

While Latin America has not traditionally been a major hub for bitcoin mining, GDA’s new facility in Argentina signals 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 move could pave the way for further industry growth in the region with other operators expanding.

“We are actively looking for more countries in the region to expand to, but we are currently focused on Argentina because it provides the ideal combination of attractive electricity prices, temperature, potential for development, and sustainable energy sources,” Mirakhmedov said.

Since Javier Milei took power in late 2023, Argentina’s bitcoin and crypto industry have been on the move. The public sector is trying to regulate the activity to further comply with the Financial Action Task Force recommendations and the International Monetary Fund requirements, while companies, startups, and users are looking for ways to maintain the growing adoption.

It’s unclear how this regulatory issue will be fixed, but GDA’s announcement underscores the importance this country might have for the industry, especially for bitcoin miners.