Since 2021, El Salvador has successfully mined approximately 474 bitcoins using a geothermal power plant driven by volcanic energy, as revealed by official sources on Tuesday. This endeavor has elevated the nation’s total bitcoin assets to an impressive $354 million at present market values.
Green Energy Mining
The Central American nation’s initiative to harness geothermal power from the Tecapa volcano represents an environmentally friendly method to procure bitcoins. The nation’s dedicated “Bitcoin Office,” a governmental body, confirmed that these efforts have added 473.5 bitcoins, valued around $29 million, to their reserves since September 2021.
President Nayib Bukele, a prominent advocate for bitcoin, has spearheaded this innovative project. His administration has installed 300 processors at the volcano to facilitate bitcoin mining. Despite bitcoin’s unregulated status and volatility, Bukele’s government continues to champion its use, highlighting the cryptocurrency’s potential to leverage natural resources for economic benefit.
Energy Consumption and Global Scrutiny
The state-owned power plant, which produces a total of 102 megawatts, dedicates 1.5 megawatts exclusively to the mining operations. These operations demand substantial energy for both computing and cooling purposes. Cryptocurrency mining, known for its intensive energy use, involves solving complex mathematical problems to secure digital currencies such as bitcoin.
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This practice has raised concerns worldwide due to its significant energy consumption and the subsequent impact on power grids and carbon emissions. Nonetheless, El Salvador’s approach to using renewable energy sources for mining is seen as a step towards mitigating these environmental concerns.
Legal Tender and International Response
In 2021, El Salvador made headlines by becoming the first country to recognize bitcoin as legal tender, a move that complemented its existing use of the U.S. dollar, adopted two decades earlier. This bold step has drawn both attention and criticism from various international entities, including the International Monetary Fund (IMF).
In addition, El Salvador’s mining venture has seen cooperation from major cryptocurrency miners such as Foundry USA, Ant pool, ViaBTC, F2Pool, and Binance Pool. These groups have collectively succeeded in earning rewards for unlocking a blockchain that verifies bitcoin transactions from the power plant over the last three years.
