El Salvador’s President Nayib Bukele instructed Mynor Gil, President of the state-owned energy company LaGeo, to start mining Bitcoin using “cheap, 100% clean and renewable energy from volcanoes”. LaGeo operates two geothermal power plants located in El Salvador in the Ahuachapan and Berlin regions. LaGeo CEO Mynor Gil replied that the company is ready to fulfill the president’s instructions.
Note that El Salvador has hundreds of megawatts of untapped geothermal potential, as well as a network of underutilized power plants. It’s cheaper to connect directly to nature than to transport electricity elsewhere.
According to a LaGeo report, 20% of the electricity that El Salvador uses comes from geothermal sources. The company has a resource potential of 644 MW, but at the moment only a third of it is using.
After his statement, the head of El Salvador clarified that the mining hub will be designed around a newly launched geothermal well with a capacity of 95 MW.
According to Bukele, the construction of a new well has already begun, the commissioning of which will ensure the production of 95 MW. He also promised: “This will develop quickly”! This can be resolved within a year. Some Bitcoin proponents noted that El Salvador could become one of the largest renewable-source cryptocurrency mining centers in the world.
Bitcoin is the official means of payment in El Salvador
On June 9, Bitcoin became the legal tender in El Salvador as a result of the adoption of the relevant law by the country’s parliament. The country’s president proposed legalizing cryptocurrency at the beginning of the week, and on Wednesday the country’s congress passed this decision by a majority vote (62 out of 84). Against this background, the bitcoin rate rose to $ 35,000. The capitalization of the largest digital currency increased over the day by 6.7% to $ 654.92 billion.
Acceptance of Bitcoin for payment will become mandatory in the country. The head of El Salvador stressed that the cryptocurrency will be legal tender along with the US dollar. Taxes can also be paid in BTC.
The government also plans to create an official crypto wallet, and will store $ 150 million worth of Bitcoin in it in a trust fund based on the Development Bank of El Salvador to ensure the automatic and instant exchange of BTC for the US dollar.
“Green” mining problems
There are over 20 volcanoes in El Salvador, some of which are active. LaGeo uses volcanoes to generate geothermal energy. While the concept is not new, for example, Genesis Mining in Iceland uses underground heat to generate electricity. But this is a lucrative argument, as the environmental concerns of Bitcoin mining criticized by some companies and governments.
The environmental impact of cryptocurrency mining is one of the most pressing issues in the industry. Recently, this topic has often flashed on the agenda. For example, China has introduced tough miner policies to limit carbon emissions. The country’s leadership announced that it does not intend to shift individual risks onto the shoulders of society.
Tesla’s CEO Elon Musk also spoke about the environmental consequences of mining. The billionaire recently announced that Tesla would no longer accept Bitcoin payments for new cars. He justified his decision by the fact that Bitcoin mining spoils the ecology of the planet.
However, El Salvador found an opportunity to solve this problem by adapting the environmentally friendly energy of volcanoes for Bitcoin mining.