Frank Holmes, a man who’s spent decades navigating the financial world – from gold mines to airline financing – has a new focus: Paraguay. And Bitcoin. Specifically, mining Bitcoin in Paraguay. He’s the chairman of HIVE Blockchain Technologies, and they’ve just significantly expanded their footprint there, taking over facilities previously owned by Bitfarms. It’s a bit of a land grab, really, but one driven by cheap power and a surprisingly stable political climate. Or, as stable as things get in the crypto world, anyway.
- HIVE Blockchain Technologies is expanding its Bitcoin mining operations in Paraguay, drawn by the country’s cheap power and stable political environment.
- The company is also exploring opportunities in East Africa, specifically Ethiopia, to utilize “stranded electricity” for mining operations.
- Frank Holmes emphasizes the importance of decentralization in the Bitcoin network and encourages miners to innovate beyond simply mining Bitcoin.
HIVE didn’t start with Bitcoin. They were early miners of Ether, back when it was profitable and didn’t require a PhD in computer science to understand. When Ethereum switched to Proof-of-Stake, they found themselves with a lot of specialized hardware and a decision to make. They could’ve tossed it all, but Holmes saw an opportunity. GPUs, it turns out, are also pretty good at artificial intelligence. It’s not quite a Ferrari versus a Bronco, as Holmes puts it, but the difference between mining Bitcoin and building AI infrastructure is substantial. Bitcoin mining is about scale; AI is about precision. And a whole lot more money.
Paraguay: A Miner’s Paradise?
So, why Paraguay? It boils down to power. The Itaipu Dam, shared with Brazil, is massive – 14 gigawatts, eight kilometers long. It’s so big, Paraguay sometimes has excess electricity. And excess electricity, as any Bitcoin miner knows, is a beautiful thing. HIVE is finishing construction on their expanded facilities, and Holmes is confident they’ll have the biggest growth profile in 2025. They’re doing it without resorting to the “funky convertible debentures” other miners are using to buy Bitcoin, a practice Holmes views with a healthy dose of skepticism. “Every time everyone starts doing this binge debt buying…Bitcoin then goes to a correction, and they all get strangled,” he says. A rather blunt assessment, but probably accurate.
The story of Bitfarms’ exit is a bit messy. A CEO departure, a tariff imposed by the Paraguayan government, and a reverse takeover by Stronghold. It created a vacuum that HIVE happily filled. The tariff, thankfully, is expected to disappear next year. For HIVE, it’s a win-win. They get cheap, green energy, and Paraguay gets a reliable buyer for its surplus power. It’s a simple equation, really. And simplicity, in the often-chaotic world of crypto, is a rare and valuable commodity.
But Paraguay isn’t the only place HIVE is looking. East Africa, specifically Ethiopia, is on the radar. Ethiopia has “stranded electricity” – dams built with funding from the World Bank, but lacking the infrastructure to distribute the power. It’s a common story: good intentions, flawed execution. HIVE sees an opportunity to put that wasted energy to work. They’re aiming to grow from 6 EH/s to 25 EH/s in the next nine months, a pretty ambitious goal.
The State of the Mining Union
Holmes isn’t entirely optimistic about the broader mining industry. He sees a shift, with major U.S. corporations focusing more on *holding* Bitcoin than actually *mining* it. They’re all trying to emulate Michael Saylor, which isn’t necessarily a bad thing, but it’s not helping to decentralize the network. “You need to have growth in mining operations so we become even more decentralized,” Holmes argues. He suggests some miners should focus on the Lightning Network or Ordinals infrastructure to differentiate themselves. It’s a fair point. Everyone chasing the same Bitcoin isn’t exactly fostering innovation.
He also praises Bitdeer’s move into ASIC manufacturing, noting that the founder was a co-founder of Bitmain. “Coming in with a new piece of technology which is very energy efficient…I think that’s very good and competitive.” It’s a sign of maturation, he believes, a move away from simply buying and holding towards building and innovating. The mining industry, he suggests, is going through a similar evolution to the gold mining industry, with a separation between the miners and the bullion holders. And, like the gold industry, quality will ultimately prevail.
HIVE, it seems, is betting on quality, green energy, and a bit of strategic opportunism. They’re not chasing hype, they’re building infrastructure. And in a world of crypto volatility, that might just be the smartest strategy of all. It’s a long game, and Holmes, with his decades of experience, knows a thing or two about playing the long game.