Will Argentina Use Waste Gas to Mine Bitcoin?

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  • Argentine presidential candidate Sergio Massa has proposed utilizing excess natural gas from gas and oil drilling operations for Bitcoin mining
  • This approach aims to repurpose waste gas, which would otherwise be flared or released, for the purpose
  • Critics have voiced concerns about infrastructure and direct government involvement

A contentious proposal put forth by Argentine presidential candidate Sergio Massa could see waste gas from a region known as “Dead Cow” used for Bitcoin mining. Massa has suggested using excess natural gas from the oil fields in Vaca Muerta (which translates as “Dead Cow”) for Bitcoin mining, sparked a debate within the country’s cryptocurrency community. The use of waste gas for Bitcoin mining, gas that would otherwise be flared or dispersed another way, is already being experimented with, although critics have raised several objections including a lack of infrastructure and local know-how.

Waste Gas Already Used for Bitcoin Mining

Vaca Muerta is named after the source of the significant shale oil and gas deposits that were found in the western Argentinian region in the late 29th century, having originated from the fossilized remains of huge animals millions of years ago.

The region has become a hotbed of oil and gas extraction, leading to large amounts of excess gas being wasted through flaring, where it is burned away into the atmosphere. Not only is this a waste of gas it is bad for the environment. 

Massa’s proposal seeks to harness this surplus gas to fuel Bitcoin mining operations, a process trialed since last year in North Dakota by ConocoPhillips, Alaska’s largest crude oil producer. A month after this, Exxon announced plans to sell waste gas and oil to Bitcoin mining firms for the same purpose.

Not Everyone Agrees

Despite its proponents and clear environmental advantages, Bitcoin miners and advocates have shown skepticism over the idea. In a recent online forum hosted by NGO Bitcoin Argentina, participants argued that Bitcoin mining is a highly complex and competitive industry, making it challenging for the government to engage effectively with the limited knowledge it currently possesses. 

Critics said that the government should instead focus on creating a favorable environment for private mining enterprises rather than getting directly involved, proposing ideas such as reducing taxes and easing restrictions on equipment imports.

While Massa’s proposal reflects the growing mainstream acceptance of Bitcoin in Argentina, even the local crypto community realizes that the risks inherent of state-sponsored Bitcoin mining may outweigh the potential benefits.