A crypto building, a 24-floor "crypto-smart" building with a bitcoin mining farm in its basement, which will generate an income for the building's operations, allowing it to cover the cost of the edifice’s maintenance and upkeep. In addition, the building will display different NFTs as decoration in its lobby, whose will belong to members of the committee and homeowners.
The building will be located in Belgrano, Buenos Aires. It has already been pre-launched, although actual construction should start after the second quarter of 2022. According to the project, the building will have more than 100 apartments (with 2, 3, or 4 bedrooms), and many of them have already been pre-sold, with prices of around 2,500 USD per square meter. Next Pampa 2.0 was created by Newlink Capital, an investment group.
Damian Lopo, Newlink Capital’s founder and Next Pampa 2.0’s main project developer, explained that the firm is well aware of Bitcoin’s volatility, therefore the plan is to calculate the average bitcoin price for the past 12 months and use that average price to scale the mining farm in a way that potentially will allow the mining operation to cover 100% of the cost of the building’s expenses. Essentially, the Bitcoin’s price is likely to keep fluctuating long after the mining farm has been set up.
According to Damián, the best-case scenario is:
1) Bitcoin’s price rises to values that produce a surplus
2) The surplus could then be distributed among the residents
3) The crypto building could end up “paying residents” for living in it
Damián also identified two major risks that could let the project fail:
1) Bitcoin’s price crashes so much that it isn’t possible for Next Pampa 2.0’s mining farm to sustain the building's own maintenance
2) Bitcoin crypto mining gets banned in Argentina
There are currently no laws regarding crypto mining, but Damián doesn’t rule out that possibility. If that scenario will play out, Next Pampa 2.0 will have a second option, and that is the clean energy.
It's important to highlight that In Argentina, energy is relatively cheap, and only financial institutions are banned from operating with cryptocurrencies, because of the risks associated with operations with these assets, as they described crypto. This led to a major boom in Bitcoin mining in the country by non-institutions .
According to a report by the World Economic Forum, in 2020, renewable energies were the cheapest source of energy across the world. Particularly, solar energy has become the cheapest source of energy in history, according to the International Energy Agency (IEA). Moreover, according to Statista, household electricity in the South American country cost an average of 76.24 USD/MWh in 2020, while the average price of the megawatt per hour of solar power ranged from 54 USD to 60 USD.
Argentina’s undersecretary for renewable energy said:
“For every 1,000 megawatts in renewable energy, the country saves 300 million USD annually in liquid fuel”
This is why Damián estimates the Next Pampa 2.0’s expenses to be up to 50% lower — as the building will be powered by solar panels in its totality, from LED lights in common spaces to pre-heating systems to heat the water. In conclusion, Damián explains that Argentina’s crypto building will have to coordinate with a specialized company to take care of the mining equipment’s maintenance and upgrades as needed, as well as the solar panels (which will need to be cleaned and/or checked during annual inspections.