With rising unemployment rates and rampant economic uncertainty, in the wake of the Covid crisis, a growing number of Brazilians are finding an alternative source of income in cryptocurrency mining. GPU platforms have been spotted even in the favelas, as a relatively small investment can earn more than the average salary in Brazil.
Pandemic and uncertainty are pushing more Brazilians towards cryptocurrency mining
The ongoing coronavirus pandemic has taken a heavy toll on Brazil and the country ranks among the hardest hit, with more than 450,000 deaths from Covid-19. South America’s largest economy shrank by more than 4% in 2020, leading to record unemployment for nearly a decade – 14.3 million citizens are unemployed, the national statistics office said earlier this week. year.
Low or no wages, along with bleak economic prospects, have pushed Brazilians to find new ways to make ends meet. According to a recent report from Portal do Bitcoin, an increasing number of people in the country are turning to crypto mining as an alternative source of income. Government data showing a surge in hardware imports and electricity consumption confirmed the trend.
Profitability varies by scale, but a 34-year-old Piumhi student helped crypto media outlets get a feel for the economics of home mining. Expedito Felipe began manufacturing ether (ETH) in January, “to increase, diversify” its income, by investing 47,000 reals (about $ 9,000) in equipment. He earns between 3000 and 5000 reals per month (about $ 600 – $ 900) and only spends about $ 100 on electricity.
In the absence of exact numbers, it is difficult to accurately estimate the true dimensions of home-based mining activity in Brazil, but circumstantial indicators show that it is booming. Several Facebook groups with large memberships disseminate information on technical aspects, while Youtube videos on the subject have accumulated hundreds of thousands of views. According to some reports on social media, the platforms are now mining even in the favelas, the poorest neighborhoods in Brazil.
Brazil imports video cards for $ 20 million in the first quarter of this year
Socio-economic problems such as unemployment, lack of opportunities and the devaluation of the Brazilian real may partly explain the crypto-mining boom, but according to José Guilherme Silva Vieira, professor of economics at the Federal University of the Paraná, the positive difference between returns and costs is what really sparks popular interest. Speaking to Portal do Bitcoin, he explained:
The costs are defined by the equipment used and the expenses. Mining consumes a lot of electricity. Over the past 12 months, however, the activity’s returns have been catapulted by the excessive valuation of cryptocurrencies.
Graphics cards are a critical piece of hardware for home crew rigs, and Brazil has seen a peak in imports this year. According to data compiled by the Ministry of Industry, Foreign Trade and Services, Brazilian companies only imported GPUs for 106 million reals (over $ 20 million) in the first quarter, an increase by four compared to the same period of 2020.
Electricity consumption in some areas has also increased. There has not yet been an official government statement linking the increase in energy consumption to cryptocurrency mining. However, one of Brazil’s largest electricity distributors, Enel Distribuição São Paulo, discovered 69,000 cases of grid theft in 2020 alone, in the 24 municipalities served by the utility company. This is almost 20% more than the previous year.
Is Home Cryptocurrency Mining Profitable in Your Country? Share your thoughts on the subject in the comments section below.
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