El Salvador Mines 474 Bitcoin with Volcanic Energy

Despite criticism, President Nayib Bukele remains committed to Bitcoin, securing a significant victory in the 2024 election.

May 15, 2024 - 18:03
May 15, 2024 - 20:00
 9
El Salvador Mines 474 Bitcoin with Volcanic Energy
Reading time - 2 min

El Salvador has amassed 5,750 BTC valued at $354 million over a span of three years. Since 2021, the country has utilized volcanic geothermal energy to mine 474 Bitcoin, equivalent to $29 million. This BTC was extracted using 300 mining processors powered by the Tecapa volcano, with 1.5 megawatts (MW) allocated for crypto mining out of the state-owned power plant's 102 MW capacity.

Amid rising concerns about BTC mining's environmental impact due to its electricity usage and reliance on fossil fuels, El Salvador has emerged as a leader in renewable energy-driven mining practices.

In a groundbreaking move in 2021, El Salvador became the first nation to embrace Bitcoin as legal tender alongside the US dollar, introducing various Bitcoin-focused policies, including the establishment of a geothermal plant dedicated to BTC mining. At present, El Salvador's Bitcoin holdings stand at 5,750 BTC, valued at approximately $354 million.

Since 2021, global entities like the World Bank have criticized El Salvador's Bitcoin adoption, especially during the bear market of 2022-2023, which intensified scrutiny of President Nayib Bukele's decisions. Despite this, Bukele reaffirmed his commitment to Bitcoin by announcing the country's daily purchase of one BTC. Bukele secured a significant victory in the 2024 El Salvador presidential election, garnering widespread support.

The debate around Bitcoin mining and its environmental impact has long been contentious within the crypto industry. Organizations like Greenpeace, supported by Ripple, advocate transitioning Bitcoin from proof-of-work to proof-of-stake consensus mechanisms. Notably, New York Governor Kathy Hochul signed a law on November 22, 2023, imposing a two-year moratorium on proof-of-work crypto mining.

Elon Musk, Tesla's CEO, initially embraced Bitcoin by investing $1.5 billion and planning to accept it as payment for Tesla vehicles. However, he later reversed this decision, citing environmental concerns linked to Bitcoin mining's carbon footprint. Musk stated that he would reconsider Bitcoin payments once renewable energy powered over 50% of BTC mining operations.

Recent reports indicate that more than 60% of BTC mining relies on renewable energy sources, although Musk has not acknowledged these reports or reintroduced BTC payments for Tesla. Additionally, Tesla faces a lawsuit for violating the Clean Air Act due to harmful emissions from its Fremont factory impacting nearby communities.