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El Salvador Reveals Plan To Mine Bitcoin Using Energy Generated From Volcanoes

by : Hannah Smith on : 11 Jun 2021 18:29
PA Images

El Salvador’s president has announced new plans to harness volcanic energy to mine Bitcoin, after the country became the first in the world to officially make the cryptocurrency legal tender.

In an announcement on Wednesday, June 9, President Nayib Bukele tweeted that geothermal power generated from the country’s volcanoes would be directed towards the energy-intensive Bitcoin mining process.

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‘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’ Bukele tweeted, adding ‘this is going to evolve fast!’

The president also shared a video of what he said was a geothermal well capable of generating ‘approximately 95MW of 100% clean, 0 emissions geothermal energy from our volcanos’, which he claimed would eventually form the basis of a ‘full #Bitcoin mining hub’.

Geothermal energy works by using extreme heat from volcanoes to vaporise water, with powerful jets of steam generated from the process used to spin turbines which, in turn, generate electricity.

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In the wake of Bitcoin’s surge in value over the past six months, critics of the cryptocurrency have pointed towards the high amounts of electricity needed to generate the digital currency, arguing that Bitcoin and other similar currencies are undermining green initiatives and harming the environment. A recent report found that Bitcoin mining consumes as much energy as the country of Argentina does in a whole year.

If successful, El Salvador’s project could provide a blueprint for future environmentally friendly methods of mining the cryptocurrency. In response to President Bukele’s announcement, Twitter CEO Jack Dorsey tweeted that Bitcoin ‘incentivizes renewable energy’.

However, critics of the plans have described it as ‘political marketing’ and ‘propaganda’, per The Guardian.

Bitcoin is now legal tender in El Salvador (PA Images)PA
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Despite warnings that cryptocurrency is a volatile and as-yet unreliable currency, as of Wednesday Bitcoin is one of only two legal currencies in El Salvador, the other being the US dollar.

NPR reports that the El Salvadoran government estimates that around 70% of the country – one of the poorest in the world – does not have access to traditional financial services.

President Bukele reportedly introduced the new law as part of efforts to drive investment in the country. The legislation requires the government and financial authorities in the country to provide ‘the necessary training and mechanisms’ for citizens wishing to buy Bitcoin and access cryptocurrency transaction services.

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Topics: News, Bitcoin, cryptocurrency, Environment

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NPR
  1. NPR

    El Salvador Plans To Use Electricity Generated From Volcanoes To Mine Bitcoin