Argentine State-Owned Company Will Mine Bitcoin

Genesis Digital Assets Limited (GDA), a leading force in the global Bitcoin mining sector, has partnered with YPF Luz, a subsidiary of Argentina’s state-owned energy company YPF. Together, both partners have established a new Bitcoin mining facility that capitalizes on an innovative energy resource: stranded gas from oil fields.

Argentina Will Mine Bitcoin

This facility, situated in Rincón de Los Sauces in the province of Neuquén, is designed to transform what would otherwise be waste into a powerful energy source for high-intensity computing processes associated with Bitcoin mining.

The facility operates with a total power capacity of 7 megawatts (MW), supported by an additional 1 MW of backup power, housing 1,200 Bitcoin mining machines. It is powered by the Bajo del Toro Thermal Power Plant, collaboratively managed by YPF, Norwegian energy giant Equinor, and YPF Luz.

The energy for this mining operation comes from stranded gas—natural gas that is liberated during oil extraction but not captured for sale or distribution, typically because it is not economically viable to transport it from remote or marginally productive fields.

Stranded gas usually poses a disposal problem, often being flared into the atmosphere, which contributes significantly to greenhouse gas emissions. The new facility’s approach not only prevents this environmental harm but also uses the gas to generate electricity, effectively making productive use of a previously wasted resource.

According to recent studies, including a working paper from MIT, the repurposing of methane through techniques like those employed by GDA can reduce carbon dioxide equivalent (CO2e) emissions by between 25% and 63%. This is critical because methane is a potent greenhouse gas, responsible for about a third of current global warming.

Abdumalik Mirakhmedov, Executive President and Founder of GDA, emphasized the project’s environmental and operational advantages in a statement: “The opening of our first data center in South America is an important step in our geographic diversification efforts. This will be yet another opportunity to show the world that Bitcoin mining can have a positive effect on the environment and can be fully integrated into local communities.”

Strategic Implications For Argentina And Beyond

Argentina presents a unique landscape for such endeavors due to its substantial energy resources, favorable political climate, and a strong crypto ethos among its population. The country has been experiencing high inflation rates, which has increased the local populace’s reliance on cryptocurrencies as a hedge against economic instability.

Martín Mandarano, CEO of YPF Luz, also noted the project’s strategic fit with Argentina’s energy policies. “This project with GDA allows us to bring YPF and Equinor, two companies committed to reducing the carbon footprint of their exploration activities, an adaptable and sustainable flare gas use solution,” Mandarano stated. He further highlighted that YPF Luz had previously pioneered the generation of electricity for cryptocurrency mining from flare gas in 2022, positioning the company as a leader in innovative energy solutions.

The project also marks a significant point of expansion for GDA, which operates 20 industrial-scale data centers across North America, South America, Europe, and Central Asia, further cementing its position as a major player in the Bitcoin mining industry. With a total power capacity exceeding 500 MW globally, GDA continues to drive innovation in the integration of renewable and waste-derived energy sources into the BTC mining sector.

At press time, BTC traded at $62,406.

Featured image created with DALL·E, chart from TradingView.com