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El Salvador has taken the lead in the world when it comes to pioneering Bitcoin. According to the latest reports, El Salvador has used geothermal energy from its Tecapa volcano to mine 474 Bitcoin and has added them to its reserves since 2021.
Volcanic Power Fuels Bitcoin Mining
Under the leadership of President Nayib Bukele, a well-known Bitcoin maximalist, El Salvador has set a prime example of eco-friendly Bitcoin mining by installing 300 processors at a state-owned power plant near the Tecapa volcano. The plant harnesses geothermal energy for Bitcoin mining.
The El-Salvadorian government’s Bitcoin Office reported, “Since September 2021, these efforts have successfully mined about 473.5 Bitcoins, leveraging a minimal share of 1.5 megawatts from the 102 megawatts generated.”
Impact of Geothermal Mining in the Global Context
El Salvador has set a global precedent in the search for sustainable and responsible mining practices by integrating geothermal energy with Bitcoin mining.
Using geothermal energy, a renewable and sustainable power source, in mining operations has significantly reduced the environmental footprint emitted when traditional Bitcoins are mined using traditional methods.
“This venture not only strengthens our financial assets but also aligns with our national energy and environmental policies,” the Bitcoin Office said to Reuters.
This initiative is a collaborative venture. The government has noted, “Cryptocurrency miners including Foundry USA, Ant pool, ViaBTC, F2Pool, and Binance Pool have pooled resources to secure a reward for verifying blockchain transactions originating from our geothermal power plant.”
The collective effort has contributed to a cooperative approach and enhanced the efficiency of the mining process.
Challenges Faced
Although El Salvador’s use of sustainable and renewable energy sources for Bitcoin mining has been globally appreciated, it has not been without controversy.
In 2021, when El Salvador became the first country globally to announce its decision to adopt Bitcoin as legal tender, it drew skepticism and criticism from international bodies such as the International Monetary Fund. Nonetheless, the broader cryptocurrency mining industry continues to face scrutiny because of the significant energy consumption and carbon emissions worldwide.
El Salvador’s eco-friendly initiative of using volcanic geothermal energy to mine Bitcoins and increase its holdings, presently valued at $354 million, has set a global precedent. The country’s broader strategy is to put Bitcoin as its legal tender successfully without global criticism and other problems such as carbon emissions.