In El Salvador, the government intends to build Bitcoin mining facilities using volcanoes, which produce zero-emission, renewable energy.
El Salvador and Bitcoin
In early June, El Salvador’s President Nayib Bukele declared that he aims to send a bill to Congress to make Bitcoin legal tender. Only four months later, the country passed the bill and officially adopted Bitcoin as legal tender, becoming the first nation in the world to do so.
Bukele, a Bitcoin enthusiast, believes the flagship cryptocurrency can facilitate lower remittance fees, attract investment, and promote financial innovation. “This is going to evolve fast!” Bukele said on Twitter.
However, top international financial institutions like the IMF and the World Bank seem to dissent. Gerry Rice, the IMF’s spokesperson, warned that the adoption of Bitcoin as legal tender “raises a number of macroeconomic, financial, and legal issues that require very careful analysis.”
The World Bank also slammed the move, citing environmental concerns around Bitcoin.
“While the government did approach us for assistance on Bitcoin, this is not something the World Bank can support given the environmental and transparency shortcomings,”
a World Bank spokesperson said.
Nevertheless, El Salvador continued to double down on its Bitcoin bet, unveiling intentions to use streams of renewable energy to mine BTC.
A Push for Green Bitcoin Mining
Bitcoin mining is an energy-intensive process. According to the New York Times, Bitcoin consumes 0.5% of all energy consumption worldwide, which is approximately seven times more than Google’s entire energy consumption per year.
This extensive energy consumption has prompted numerous environmentalists to rage on the flagship cryptocurrency and criticize it over its carbon footprint. In fact, these concerns were ostensibly the reason behind China’s rigorous clamp down on crypto mining this year, as well Elon Musk’s decision to drop accepting Bitcoin as a payment.
All of this has pushed miners to look for green and renewable sources of energy. In the US, for instance, miners are inking deals with nuclear power plants to utilize the large amount of excess green energy that would otherwise go wasted for mining BTC. El Salvador, too, aims to use streams of green energy generated from volcanoes to power Bitcoin mining facilities.
El Salvador to Mine Bitcoin Using Volcanoes
After revealing his big plans to embrace Bitcoin, Bukele dropped yet another bombshell. On June 9, he tweeted that El Salvador aims to take advantage of its natural volcanos, harness their energy, and use it to power Bitcoin mining facilities. He said at the time:
“I’ve just instructed the president of LaGeoSV (our state-owned geothermal electric company), to put up a plan to offer facilities for #Bitcoin mining with very cheap, 100% clean, 100% renewable, 0 emissions energy from our volcanos.”
Despite being the smallest country in Central America, El Salvador is home to 30 volcanoes. Reportedly, 20 of those volcanoes, which belong to the circum-pacific Ring of Fire, are potentially active, enabling El Salvador to harness that power and generate geothermal energy to mine Bitcoin.
In El Salvador’s Berlin city there is a geothermal plant composed of 16 deep shafts from which steam circulates and makes turbines function. Those turbines can generate up to 107 megawatts, among which 1.5 megawatts is dedicated to Bitcoin mining, powering almost 300 mining rigs.
“We are not reducing the energy supply of El Salvador, on the contrary, we are increasing it, and from the amount that we have increased, we have taken these 1.5 megawatts to start this first step with mining,”
said Daniel Alvarez, president of for the Rio Lempa Hydroelectric Executive Commission (CEL).