Paraguay — The Fourth Bitcoin Power: 4.3% Hashrate, Itaipu, and the AI Pivot | SforNews

10 Sep, 2026
| Salome K

PARAGUAY — THE FOURTH BITCOIN POWER

Diagnosis of the Old Model and Place in the New Energy‑Digital System

INTRODUCTION: A BRIEF DIAGNOSIS

Paraguay is the most unexpected success story in the new energy‑digital system. It is a country that is simultaneously:

The world’s fourth‑largest bitcoin mining power — accounting for 4.3 % of the global hashrate (approximately 43 EH/s) [1][2][10]. Paraguay trails only the USA, Russia, and China.
A holder of a colossal hydropower surplus — 3,480 MW of excess capacity from the Itaipu Dam (14,000 MW installed capacity) [1][3].
A territory with some of the lowest electricity tariffs globally — $0.037–0.050 per kWh [1][3].
Home to Latin America’s largest miner — HIVE Digital Technologies, with a hashrate of 18.87 EH/s [4][9].

The Paraguay paradox: a nation of 7 million people ranks 4th in global bitcoin mining, outpacing Germany, Japan, and the UK [10]. It has no oil, gas, or gold. But it has excess hydropower — and it has found a way to monetize it.

Paraguay isn’t building the new system aggressively like China. It isn’t forced to build it for survival like Iran. It uses the new system pragmatically, efficiently, and without ideology.

SECTION 1. THE OLD MODEL: WHAT WAS, WHAT BROKE

The Paraguayan economic model of recent decades rested on three pillars:

Agriculture — soy, beef, exports to Brazil and Argentina.
Hydropower — the Itaipu Dam (14 GW), the world’s largest by installed capacity [3][11].
Energy exports — selling surplus to Brazil at “dumping” prices [3].

This model worked — but inefficiently.

Surplus energy went to waste. Paraguay uses only ~20 % of its share of Itaipu’s output (14 GW). The rest was sold to Brazil below market rates [3]. The country couldn’t monetize its key resource.

The economy depended on neighbors. Soy and beef exports relied on Brazil and Argentina. Energy was sold to Brazil. Paraguay lacked economic sovereignty.

Mining changed everything. Instead of selling surplus energy to Brazil at low prices, Paraguay began using it for bitcoin mining [1][2]. This allowed the country to monetize energy that would otherwise be wasted.

The map (agriculture, energy exports) no longer reflects the territory (mining, digital assets, global liquidity).

SECTION 2. ENERGY PROFILE: WHAT EXISTS, WHAT DOESN’T

Paraguay is a regional energy giant, though not a global one. The country generates 100 % of its electricity from clean sources [11].

What exists	What’s missing
Itaipu Dam — 14,000 MW (the world’s largest) [3]	Domestic hydrocarbons
Energy surplus — 3,480 MW [1][3]	Flexible grid infrastructure
Tariffs — $0.037–0.050/kWh [1][3]	Economic diversification
HIVE Digital — 18.87 EH/s [4][9]	Political stability (risks)

Key fact: Paraguay generates more hydropower than it can consume. The 3,480 MW surplus represents energy that would otherwise be lost. Mining has become a way to monetize this surplus [1][3].

HIVE Digital Technologies:

Latin America’s largest miner [4].
Acquired the Yguazú site from Bitfarms for $56 million in January 2025 [4].
Phase 2 completed: 200 MW, over 8 BTC per day [4].
Hashrate: 18.87 EH/s (among the world’s largest) [4][9].
Plans: expansion to 400 MW [4].

The company describes its data centers as “electric refineries”: “Electricity in. Bitcoin and AI revenue out” [4].

Conclusion: Paraguay has found a way to monetize excess energy through mining. This is not an “investment strategy” — it is a pragmatic solution to the problem of wasted energy.

SECTION 3. POSITION ON MINING AND CRYPTOCURRENCIES

Here lies Paraguay’s main success.

Actual situation: mining in Paraguay is legal and actively expanding [1][2].

Regulatory environment:

Mining is regulated via GCIE (a regime for energy‑intensive industries) [1].
Tariffs are fixed within the regulatory framework [1].
ANDE (the national energy company) coordinates load management [1].

Key players:

HIVE Digital — the largest operator, 18.87 EH/s [4][9].
Penguin — building liquid‑cooled infrastructure at 200 kW per rack [4].
Alps Blockchain — an Italian company with 9 farms [4].

New regulation (2026):

DNIT Resolution 47 — mandatory reporting of crypto transactions exceeding $5,000 per year, including mining, staking, and transfers [6][13].
Temporary ban bill — proposed in April 2026, a 180‑day ban due to electricity theft [5].

Challenges:

Illegal mining — growing, prompting stronger enforcement [5][14].
ANDE arrested 693 miners in Hernandarias in July 2026 [14].
Two miners were convicted of electricity theft in June 2026 [7][8].

But the key point: Paraguay monetizes its energy. It doesn’t ban mining like Venezuela. It doesn’t fight it like China. It uses it [1][2].

The Paraguay paradox: a country of 7 million ranks 4th globally in bitcoin mining [10], outpacing Germany, Japan, and the UK. It does this not because of a grand strategy, but because it has excess energy and has found a way to monetize it.

SECTION 4. AI PIVOT: A NEW VECTOR

ANDE aims to attract AI data centers.

In January 2026, the Paraguayan government issued Decree 5306, specifically designed to attract AI and cloud companies [4]. It offers:

Stable dollar‑denominated tariffs — fixed for 15 years [4].
Clean energy — nearly 100 % hydropower [4][11].
Long‑term certainty — a rarity in the Western Hemisphere [4].

HIVE is already positioning for AI:

The company describes its data centers as “electric refineries” [4].
“Electricity in. Bitcoin and AI revenue out. That’s the entire business model” [4].
The firm has 300 MW of operating capacity and another 100 MW under development [4].

In February 2026, Marco Rubio stated that Itaipu’s surplus energy could power AI development in the USA [12].

Penguin is also pivoting to AI:

“Bitcoin mining was always a means to an end: a way to quickly build world‑class infrastructure” [4].
“The bitcoin mining tariff is no longer sustainable in the medium term” [4].
The company is “fully focused on transforming its infrastructure toward AI computing” [4].

The Paraguay paradox: the country that became the 4th bitcoin power may now become an AI hub. Mining was a springboard, not the final goal [4].

SECTION 5. ARCHITECTURAL CONCLUSION: WHAT PATH IS OPEN TO PARAGUAY

Paraguay is the only country that simultaneously:

Has a hydropower surplus (3,480 MW) [1][3].
Ranks 4th globally in bitcoin mining (4.3 % hashrate) [1][2][10].
Offers some of the world’s lowest electricity tariffs ($0.037–0.050/kWh) [1][3].
Attracts major miners (HIVE Digital, Penguin, Alps Blockchain) [4][9].
Introduces regulation for AI infrastructure (Decree 5306) [4].

Unlike Venezuela, Paraguay uses its surplus energy for mining; Venezuela bans it.
Unlike Europe, Paraguay has surplus energy and monetizes it; Europe imports energy.
Unlike Russia, Paraguay has a strategy (or at least a pragmatic solution); Russia does not.
Unlike China, Paraguay isn’t building a CBDC. It simply mines.

Paraguay’s weaknesses:

Dependence on hydropower. Droughts can reduce generation.
AI risk. ANDE’s push for AI data centers could displace miners [4].
Illegal mining. Growing, creating problems for legitimate operators [5][14].
Political risk. Pressure on tariffs for crypto operators could change the economics of mining.

Main conclusion:

Paraguay won’t “import bitcoin” like Europe; it has its own energy. It won’t “build a CBDC” like China; it lacks the resources for that. It will mine — monetizing excess hydropower through bitcoin.

For Paraguay, bitcoin is not an “energy voucher” or a “strategic reserve.” It is a monetization tool — a way to turn excess hydropower into global liquidity.

CONCLUSION: HOW PARAGUAY FITS INTO THE GLOBAL TRANSITION

Paraguay is neither the architect of the new system nor its victim. Paraguay is a success laboratory.

Europe will become a permanent bitcoin importer — because it lacks energy.
China is building parallel infrastructure — because it has a strategy.
USA is trying to maintain dominance via a bitcoin reserve — because the dollar is no longer sufficient.
Russia could become an energy sovereign — if it finds a strategy.
Venezuela bans mining — and loses energy value.
Paraguay mines. It has 3,480 MW of surplus energy and monetizes it through bitcoin. It ranks 4th globally by hashrate [10] and attracts major miners [4]. It does this without a CBDC, without a bitcoin reserve, without grand strategy — simply because it works.

Global meaning: Paraguay shows that even a small country can become a player in the new system if it has a resource (energy) and the pragmatism to use it. The question is not whether Paraguay will use bitcoin. The question is whether it can maintain its position when AI data centers start competing for its energy.