With rising unemployment rates and economic uncertainty during the Covid-19 crisis, a growing number of Brazilians are finding an alternative income source in cryptocurrency mining.

Cryptocurrency Mining Becomes an Alternative Source of Income in Brazil

Crypto mining has become an alternative source of income for Brazilians amid the rising unemployment rate and growing economic concerns created by the COVID-19 crisis.

Due to the pandemic, the economy of Brazil has declined by more than 4% in 2020, resulting in 14.3 million citizens being unemployed, the National Statistical Office announced earlier this year.

The rise in unemployment and economic uncertainties has resulted in several citizens finding alternative sources of income in cryptocurrency mining according to a report by Portal do Bitcoin.

Expedito Felipe, a 34-years old Piumhi student gives an idea of the profitability of crypto mining from home. He says that he began minting Ethereum (ETH) in January, investing 47k reals ($9,000) in equipment. He earned approximately 3,000 to 5,000 reals ($600-$900) and had to pay about $100 for electricity consumption.

Brazil Imports $20 Million Worth of GPUs in Q1 2020

According to José Guilherme Silva Vieira, an economics professor at the Federal University of Paraná, the returns between income and expenditure is what really drives interest towards crypto mining, adding:

“Costs are defined by the equipment used and the expenses. Mining consumes a lot of electricity. In the past 12 months, however, the returns from the activity have been catapulted by the excessive valuation of cryptocurrencies.”

There has also been a growth explosion in hardware imports in Brazil with 106 million reals ($20 million) worth of GPUs imported in Q1 2020, according to data compiled by the Ministry of Industry, Foreign Trade, and Services.

While there has been no official statement of Brazil’s total electricity consumption from the government linking to the increased power usage to cryptocurrency mining, one of Brazil’s largest power distributors, Enel Distribuição São Paulo has discovered 69,000 cases of theft from the grid last year in the 24 municipalities, an increase of 20% from the previous year.