El Salvador mines Bitcoin with Geothermal Energy
This post is cobbled together from news sites I barrowed articles from.
SAN SALVADOR, May 14 (Reuters) - El Salvador has mined nearly 474 bitcoins since 2021 thanks to a volcano-fueled geothermal power plant, official data showed on Tuesday, bringing the government's total bitcoin portfolio to nearly $474 million at current prices.
The country's "Bitcoin Office," an official government entity, reports that government coffers now hold 5,750 bitcoins.
The new additions, 473.5 bitcoins worth some $29 million since September of 2021, were powered by a small amount of geothermal energy generated by the country's imposing Tecapa volcano, touted as a green way to accumulate the well-known cryptocurrency, which is not regulated by any central bank.
The administration of Bitcoin enthusiast President Nayib Bukele, who earlier this year was reelected to a second term, has installed 300 processors to "mine" Bitcoins from the volcano.
Of the 102 megawatts (MW) produced by the state-owned power plant, 1.5 MW are devoted to cryptocurrency mining. The so-called crypto mining process requires large amounts of energy for computing and cooling data processing centers, which perform complex math equations in order to earn cryptocurrencies like Bitcoin.
Elsewhere in the world, cryptocurrency miners have recently come under increased scrutiny for their electricity-sapping operations, and for the impact their activity has on power grids and carbon emissions.
In 2021, El Salvador became the first country to adopt bitcoin as legal tender, alongside the U.S. dollar which it adopted two decades earlier. The Bitcoin move earned Nayib's government harsh criticism for its embrace of the volatile cryptocurrency, including from the International Monetary Fund (IMF).
Cryptocurrency miners Foundry USA, Ant pool, ViaBTC, F2Pool and Binance Pool pooled their resources to win a reward for opening a blockchain that can verify the last three years of bitcoin transactions originating from the power plant, according to the government Bitcoin Office.
Reporting by Nelson Renteria; Editing by David Alire Garcia and Aurora Ellis
‘Rent A Volcano’ For Bitcoin Mining Makes Sense, Says Bukele
Bitcoin mining is a popular topic in El Salvador, one of the first countries to legitimize Bitcoin as a financial asset. As a pro-crypto leader, President Bukele has always been on the lookout for initiatives and programs that can increase adoption. And for Bukele, harnessing the country’s natural energy resources is a great way to boost crypto mining.
In reply to a post about El Salvador’s natural energy, Bukele stated that renting a volcano to mine Bitcoin makes sense. He added that this kind of approach may push the country to become the first to tap geothermal energy for Bitcoin production.
BTC market cap currently at $1.947 trillion. Chart: Coingecko.comMining Rigs Powered By Geothermal Energy
El Salvador is one of the leaders in BTC mining, and it has already mined 474 Bitcoins valued at > $47 million since 2021. In a post on November 25th, Bukele introduced the concept of a “rent a volcano” BTC mining program inspired by the success of its geothermal mining facilities.
Bukele’s post responded to another Twitter/X user’s post on BTC mining using geothermal energy. The president reacted by saying that with 170 volcanoes, the program to rent out volcanoes is plausible.
President elect Donald J. Trump jumps on the Bitcoin bandwagon
From Trump’s post on Truth Social announcing his choice for A.I. and Crypto Czar.
@realDonaldTrump
I am pleased to announce that David O. Sacks will be the “White House A.I. & Crypto Czar.” In this important role, David will guide policy for the Administration in Artificial Intelligence and Cryptocurrency, two areas critical to the future of American competitiveness. David will focus on making America the clear global leader in both areas. He will safeguard Free Speech online, and steer us away from Big Tech bias and censorship. He will work on a legal framework so the Crypto industry has the clarity it has been asking for, and can thrive in the U.S. David will also lead the Presidential Council of Advisors for Science and Technology…
Mining crypto currencies and processing artificial intelligence are both highly energy intensive operations. As crypto miners know, to be cost effective at mining Bitcoin you need cheap energy. CoinShares tells us it costs on average about $53,000 to mine one Bitcoin. It is very profitable to mine Bitcoin when you can sell one for close to $100k each. As time goes on the cost to mine a Bitcoin will rise with each Bitcoin halving event, reducing the number of Bitcoins mined in a block. Halving events occur every 4 years, so the Bitcoin block reward will decrease from the current reward of 3.125 to 1.5625 in mid April 2028.
The current mined supply is 19,790,568 Bitcoins. The maximum number of Bitcoins ever to be mined has a hard cap of 21 million. Therefore a total 1,209,432 remain to be mined as of the time of writing this article. Bitcoin miners are all competing for a declining supply of Bitcoins yet to be mined. It will be interesting to see how David O. Sacks will navigate our way to becoming a Bitcoin powerhouse. Will he promote mining in the western US, Hawaii and or Alaska to take advantage of geothermal sites, or will he rent a volcano from El Salvador? An obvious site would be Yellowstone National Park with its geothermal energy near the surface, but I don’t think the public would be in favor of that as a Bitcoin mining location.
Given the success that El Salvador has had mining Bitcoin, my guess is that other jurisdictions that have volcanoes in their midst might attempt replicate what is going on in El Salvador. And geothermal energy would make sense for powering artificial intelligence operations as well. It will be interesting to see how this all plays out.
In the mean time, anyone wanting to see how a functioning Bitcoin economy works can travel to Bitcoin Beach. Hope to see you there.