This brings us to El Salvador’s “regrets’ over not switching to Bitcoin much earlier. In a Twitter exchange with Peter Schiff, Chairman of SchiffGold.com, El Salvador’s president, Nayib Bukele, provided some data about his country’s gold reserves.
When the price of Bitcoin plummeted from 52K to below 44K Bukele announced that El Salvador bought the dip by accumulating 100 more BTC. With this announcement, Peter Schiff commented,
“There are a lot more dips coming. How much taxpayer money do you intend to waste?”
“None.” “We’re already in the green from our last purchase in less than 24 hours.”
El Salvador’s president, Nayib Bukele, then disclosed that his country has gold reserves worth $79 million, totaling 44.106 oz. He stated that these gold holdings had decreased by 0.37 percent and that if they had sold it a year ago and bought Bitcoin instead, it would now be worth $204 million.
Big News For The Cryptocurrency Market
El Salvador plans to build a Bitcoin City in 2022. This means that the city will be entirely funded and run on Bitcoin. This follows the country’s overwhelming support for bitcoin and other cryptocurrencies. Over the summer they made bitcoin one of their main currencies. El Salvador announced plans to begin mining bitcoin using geothermal energy derived from volcanoes. This addresses many of the issues that people have with bitcoin. You must mine in order to create a bitcoin. This causes a problem, at least for the environment, because mining bitcoin requires a significant amount of energy. As of September of this year, all the bitcoin mining operations throughout the world use around 0.5% of all the electricity in the world. This amounts to approximately 5.5 million people using electricity, which is greater than the population of countries such as Finland.
Bitcoin mining and energy consumption have increased tenfold since five years ago, which could have serious consequences for our environment. This is due to the fact that the majority of the world’s electricity is generated using nonrenewable resources such as coal and natural gas. Coal is a fossil fuel, which means there is a limited supply of it on our planet. We can’t use it once it’s gone, and right now, a lot more people around the world rely on electricity, and unfortunately coal – to power their homes, vehicles, and businesses. This is why a large part of the world is shifting to renewable energy sources such as solar and geothermal energy. We also see a lot of wind energy being developed around the world.
This is why, over the last year or so, thousands of businesses have abandoned their support for bitcoin and other cryptocurrencies. The biggest thing that stands in the way of Bitcoin is its environmental effects. El Salvador is working on an experiment that will help solve that problem permanently. If all bitcoin and cryptocurrency miners switched to renewable energy sources, they would be able to mine their coins without harming the environment. El Salvador has approximately 23 active volcanoes and is located in extremely hot areas of the earth. Reservoirs of water can be found, similar to a volcano. This is steam produced by hot water. This steam can be converted into energy, which can then be used to generate electricity. It is completely renewable because we can use it basically as long as the water flows back into the reservoir and is converted back into steam. This is a significant step forward for bitcoin, as it may help in its global adoption.
El Salvador’s bitcoin city will function similarly to any other city. With residential businesses and transportation resources available to everyone. The only significant differences in bitcoin city are that you can only use bitcoin to buy things and there will be no taxes. With El Salvador’s Bitcoin City, we’ll see if Bitcoin works as a viable payment option.
This is a positive step for cryptocurrency because it demonstrates that people are interested enough in it to build an entire city around it. Because this city will be built next to a volcano, all Bitcoin mining and energy consumption will be handled by geothermal energy. If the experiment is successful, or if it raises plenty of issues, it may entice many more companies or countries to support bitcoin and other cryptocurrencies. El Salvador is also collaborating with Blockstream to develop a Bitcoin bond. This bond will be worth around $1 billion, to begin with, with half of the money going into mining Bitcoin and building the infrastructure around Bitcoin. Let’s see if other countries will follow in El Salvador’s footsteps.