Thursday 1 December 2022

Costa Rica hydro plant gets new lease on life from crypto mining

Costa Rica lacks specific regulation for cryptocurrencies

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1 December 2022 - At The Banks - BCCR

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A small river in the middle of coffee plantations, sugar cane fields and a forest provides energy to a hydroelectric power plant in Costa Rica that feeds hundreds of computers wired up to the cryptocurrency mining business.

More than 650 machines from 150 customers operate non-stop from eight containers powered by the plant next to the Poas River, from San Jose, which generates nearly all its energy from green sources.

Eduardo Kopper, owner of Data Center CR, works in the data center at the Poas I hydroelectric plant that provides the energy to the computers, in Alajuela, Costa Rica January 8, 2022. Picture taken January 8, 2022. REUTERS/Mayela Lopez

The plant was forced to reinvent itself after 30 years because the government stopped buying electricity during the pandemic due to the surplus power supply in the country, where the state has a monopoly through the autonomous government agency, the Instituto Costarricense de Electricidad (ICE), on energy distribution.

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“We had to pause activity for nine months, and exactly one year ago I heard about Bitcoin, blockchain and digital mining,” said Eduardo Kooper, president of the family business that owns the 60-hectare farm Data Center CR and the plant.

“I was very skeptical at first, but we saw that this business consumes a lot of energy and we have a surplus.”

The hydroelectric company, with its three plants valued at US$13.5 million and a three Megawatt capacity, invested US$500,000 to venture into hosting digital mining computers.

Kooper said international cryptocurrency miners are looking for clean, cheap energy and a stable internet connection, which Costa Rica has plenty of. However, he said Costa Rica’s government should be more aggressive about trying to attract more crypto mining business, although he gave no specifics.

Costa Rica lacks specific regulation for cryptocurrencies, unlike El Salvador, which became the first country in the world to adopt Bitcoin as legal tender in September 2021.

Containers of Data Center CR, which keep the computers used for cryptocurrency mining, are pictured at the Poas I hydroelectric plant that provides energy to the computers, in Alajuela, Costa Rica January 8, 2022. Picture taken January 8, 2022. REUTERS/Mayela Lopez

Costa Rica’s central bank said it was providing space for technological innovation to allow a financial technology industry to take shape and was constantly monitoring developments.

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So far all Data Center CR customers are local, such as Mauricio Rodriguez, a 31-year-old computer security engineer who entered digital mining to earn extra money from home in 2021 with equipment valued at US$7,000.

“Installing it in this place is much more profitable than at home,” at almost half the cost, he calculated, after connecting his computer to the network at the river-powered plant.

Report by Reuters

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Reports by QCR staff

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