By Richard S. Ehrlich (originally appeared on the Scoop Citizen Community)

After China’s recent cryptocurrency crackdown, impoverished Laos is now allowing Bitcoin mining, fueled by abundant hydroelectric power from the Mekong River and shrugging off U.S. warnings of disastrous environmental problems.

The surprise announcement on September 9 by the Prime Minister’s Office, allowing the creation of Bitcoin, Ethereum, and other blockchain-based currencies, makes Laos the only Southeast Asian country to officially permit and participate in it.

China had allowed Bitcoin miners to feed on its cheap electricity for several years — mostly in the provinces of Inner Mongolia, Xinjiang, Sichuan and Yunnan — but shut down their systems in May, by tightening regulations.

Worried foreign investors struggled to export expensive, delicate, massive computers out of China while scouring the world for fresh places to set up.

China’s central bank also banned on all cryptocurrency transactions, in an effort to control the flow of money in and out of the country.

“China has shot itself in the foot by going after its Bitcoin miners,” Forbes reported.

“The U.S. is becoming a big-time miner in its wake.”

Mining is now allowed in Texas, South Dakota, Nebraska, North Carolina, Ohio, Pennsylvania and other U.S. states.

“It’s happening! Texas will be the crypto leader,” Texan Governor Greg Abbott tweeted in June.

International miners also moved from China to Canada, Kazakhstan, Uzbekistan, Russia and elsewhere.

Mining or “minting” fresh crypto involves constructing and operating huge, linked computer “rigs” to determine a 64-digit hexadecimal “hash” number based on increasingly complex algorithms — essentially guessing trillions of possible random answers.

By doing so, miners confirm Bitcoin and transactions are genuine, and add them to the blockchain.

Those decentralized miners then collect a commission in Bitcoin after validating one megabyte of Bitcoin transaction data.

In competition to host miners, several countries in the northern hemisphere boast of year-round icy temperatures to cool giant, heat-generating databases.

Invitations from Iceland also flaunt its an abundance of hydroelectricity and geothermal energy.

Unfortunately for Laos, the weather is usually hot, and its jungle-clad mountains do not receive snow.

Its cheap hydroelectricity however is a dazzling lure.

As a result of 73 hydroelectric plants, electricity is Laos’ main export — 30 percent of the country’s total — valued at $6 billion last year.

Laos also offers inexpensive real estate, poorly paid workers, loose regulatory enforcement, and special economic zones with financial sweeteners for investors.

But the country’s low-educated workforce, opaque bureaucracy, limited transportation routes, alleged corruption, and inefficient legal system could dampen some foreigners’ enthusiasm.

For the government to profit, foreign computer experts would need to arrive in Laos to build, operate, repair, clean, and test crypto databases inside large warehouses linked to hydroelectric stations.

A slew of top Laotian government officials are ready to help, including the ministers of finance, energy and mines, planning and investment, technology and communications, and public security.

Local investors for mining and trading include Wap Data Technology Laos, Phongsubthavy Road & Bridge Construction Co., Sisaket Construction Co. Ltd., Boupha Road-Bridge Design Survey Co., Ltd., the Joint Development Bank, and the Phousy Group, according to the government-approved Laotian Times.

The government’s Bank of Laos will decide regulations about cryptocurrency use inside the tiny, debt-saddled country which is dependent on U.S. aid, Chinese loans, Thai investment, and other foreign sources.

It is illegal for citizens of Laos to buy or sell cryptocurrencies.

Ignoring the law, some Laotian businesses accept cryptocurrencies as payments, and advertise opportunities to invest in digital currencies, the Laotian Times said.

Laos is desperate to modernize from the 1965-1975 devastation left by the U.S. Air force, which created one of the world’s most heavily bombed countries.

The Pentagon tried but failed to stop the communist North Vietnam Army using Laotian territory as a so-called Ho Chi Minh Trail, which allowed them to infiltrate U.S.-backed South Vietnam.

Despite presenting itself as a hammer-and-sickle communist regime, Laos welcomes international capitalists seeking to exploit its natural resources.

While Laos expects crypto mining will harness the Mekong River and its tributaries for fast cash, U.S. rhetoric is targeting the dams.

The Mekong begins in Tibet’s glaciers, crosses China, and meanders from Laos’ northern border south into Cambodia.

The river then broadens into southern Vietnam’s Mekong Delta and dumps into the South China Sea near Ho Chi Minh City.

The U.S. supports efforts by Cambodia and Vietnam to halt dam construction, and enforce regulations on the seasonal timing and quantity of water retained and released by the dams, so the two downriver nations’ fishery and agricultural sectors do not wither.

The U.S. and other critics portrays the dams as the worst environmental crisis Southeast Asia currently faces, amid concern that Beijing joined other investors rushing construction to extract quick profits.

Most Laotian hydroelectric power is sold to the government-owned Electricity Generating Authority of Thailand which lights up Bangkok, Chiang Mai and other cities.

Laos needs just a few jolts of electricity because its scattered population is only seven million.

Chinese companies built many of the dams while several were built and financed by Thais and others.

A total of 140 dams are expected to eventually punctuate Laos.

(Richard S. Ehrlich is a Bangkok-based American foreign correspondent reporting from Asia since 1978. Excerpts from his two new nonfiction books, “Rituals. Killers. Wars. & Sex. — Tibet, India, Nepal, Laos, Vietnam, Afghanistan, Sri Lanka & New York” and “Apocalyptic Tribes, Smugglers & Freaks” are available at

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