El Salvador Mines Nearly 474 Bitcoins Using Volcano-Fueled Geothermal Power Plant
El Salvador, the first country to adopt Bitcoin as legal tender alongside the US dollar, has made significant strides in cryptocurrency mining thanks to its unique geothermal resources. Official data released on Tuesday revealed that the country has mined nearly 474 bitcoins since 2021, amounting to approximately $354 million at current prices.
The country’s “Bitcoin Office,” an official government entity, disclosed that the government now holds a total of 5,750 bitcoins in its portfolio. These new additions, totaling 473.5 bitcoins worth around $29 million since September 2021, were facilitated by harnessing a small portion of the geothermal energy generated by the Tecapa volcano.
Under the administration of President Nayib Bukele, a vocal supporter of Bitcoin, 300 processors have been installed to mine bitcoins using the geothermal energy from the volcano. Despite concerns over the environmental impact of cryptocurrency mining, Bukele’s government views this approach as a green and innovative way to accumulate digital assets.
Of the 102 megawatts (MW) produced by the state-owned geothermal power plant, 1.5 MW are allocated to cryptocurrency mining. The mining process, which involves complex mathematical computations to secure cryptocurrencies like Bitcoin, requires substantial energy for computing and cooling data processing centers.
While cryptocurrency mining has faced scrutiny globally due to its energy-intensive nature and environmental implications, El Salvador’s approach underscores its commitment to leveraging renewable energy sources for economic growth.
President Bukele’s decision to embrace Bitcoin as legal tender has faced criticism, including from the International Monetary Fund. However, the recent success in cryptocurrency mining demonstrates the potential benefits of innovative policies. By diversifying revenue streams and capitalizing on clean energy resources, El Salvador aims to strengthen its economy and improve the livelihoods of its citizens.
Looking ahead, the integration of cryptocurrency mining with renewable energy sources presents opportunities for other countries with excess clean energy, such as hydroelectric power. Exploring alternative revenue streams like crypto mining could lead to economic growth, enhanced GDP, and improved living standards for citizens. Proof of work methods as with bitcoin have proven to be a positive outcome while proof of stake methods as with Ethereum may not be optimum for such countries as there would need to be a substantial stake involved to achieve the heights of a bitcoin mining farm, potential lies in proof of time as with Pecu Novus, as that requires the least amount of computing and resources to gain rewards. In either case there is value there for countries that have an energy surplus and no where to use it, as with countries in Africa which can be a big beneficiary of using their energy surplus to supplement their countries revenue. This can help pay down debt and enhance the lives of their citizens.
As the world increasingly embraces cryptocurrencies as a part of the future financial landscape, forward-thinking nations like El Salvador are paving the way for innovative approaches to wealth generation and economic development.
James Cullen
Digital Assets Desk
