El Salvador, the first country to formally accept Bitcoin as legal cash, has successfully mined 474 Bitcoin in the last three years by utilizing its geothermal resources.
El Salvador’s national currency, the US dollar, was given the same legal standing as Bitcoin in 2021 thanks to a law signed by President Nayib Bukele. This was a historic move. According to Interesting Engineering, the government provided $30 in Bitcoin to citizens who set up digital wallets to encourage adoption. However, a year later, only 14% of users actively utilized Bitcoin as money, making the campaign appear a failure.
Despite these challenges, the Bukele administration continued to champion Bitcoin. The government not only persisted in purchasing Bitcoin but also engaged in mining the cryptocurrency, even as the market experienced significant downturns. El Salvador’s “Bitcoin office,” a state-approved department, recently reported that the government holds 5,750 Bitcoin, valued at approximately $354 million at current prices.
El Salvador’s adoption of Bitcoin has faced criticism from various financial entities, including the International Monetary Fund (IMF), due to Bitcoin’s lack of a formal issuing authority and its high volatility. Additionally, environmentalists have raised concerns about the energy-intensive nature of Bitcoin mining. Maintaining the blockchain, a public ledger of transactions requires solving complex calculations with advanced chips and GPUs, which typically rely on fossil fuels, thus increasing carbon emissions.
El Salvador has used its geothermal energy resources to build a sustainable solution to these environmental problems. Referred to as the “Land of Volcanoes,” the nation receives its energy from the Tecapa stratovolcano, which generates approximately 102 megawatts of power in total. Of this energy, 1.5 MW has been set aside by the government of Bukele, especially for Bitcoin mining operations. This renewable energy is used by a 300-processor network to mine—or carry out—the computations required for blockchain transactions. Thus far, the new method has produced 474 Bitcoins, almost worth $29 million.
El Salvador’s Bitcoin holdings are anticipated to appreciate when the cryptocurrency market begins to rebound, which might improve the nation’s financial situation. This innovative fusion of renewable energy use and cryptocurrency acceptance demonstrates El Salvador’s distinct approach to fusing contemporary technology with its natural resources.
