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The Argentine town of Sorradino in Santa Fe Province is planning to mine cryptocurrencies in order to raise the funds required for modernizing rail infrastructure and battle inflation rather than depending on government loans and banks.
Till now, the city has bought six graphics cards and further plans to purchase an application-specific integrated circuit (ASIC), as reported by a local news outlet. Juan Pio Drovetta, the mayor of the city pointed out that the community supports the initiative, which he says is benefitting from generating new tokens and not speculation.
Drovetta explains that they do not believe in making a profit through “speculative activities” using which there are chances that they could win or lose. Drovetta says they guarantee to win by creating crypto assets.
Drovetta also shared that Sorradino earlier “based on market prices” planned to raise between $540 and $624 per month of tokens, indicating the fact that the city would rather sell its minted tokens instead of locking them up. Further Drovetta revealed that the city also plans to use mining revenue for paying taxes. However, he didn’t specify which cryptocurrency it plans to mine.
Crypto mining means verifying cryptocurrency transactions on the blockchain network and adding them to a distributed ledger. Particularly, crypto mining is done to prevent double-spending of crypto assets in a distributed ledger. Initially, a regular individual could mine Bitcoins, however, that’s not true anymore. Now, powerful computers and access to a great amount of cheap electricity are the utmost requirements for Bitcoin mining to be successful.
Just like in other countries, the mining process is criticized in Argentina too because of its massive electricity bills. The power supply of the neighboring towns could be affected because of these costs. China and Kazakhstan reportedly have been protesting against crypto mining centers in their countries.
Argentina To Experience Contraction Bigger Than 11% Contraction Of 1998-2002
The Argentine city to has suffered from the pandemic and inflation followed it, making it difficult for the local government to finance the maintenance of the rail infrastructure of the city. Quite recently, Sorradino experienced its first basic train service in 33 years.
However, even before the advent of the pandemic, the analysts forecasted a third-year recession in 2020 in Argentina. Now it is being forecasted that the contraction in Argentina will surpass the 11% contraction experienced in 1998-2002. Argentina used to be among the wealthiest countries in the world and has a GDP per capita of more than most of the countries in Europe.
Meanwhile, the IMF or International Monetary Fund has urged Argentina to not use digital assets because of its $45B debt restructuring deal.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
