El Salvador continues to make headlines with its groundbreaking approach to Bitcoin mining. President Nayib Bukele recently suggested an innovative strategy that could revolutionize the way the country harnesses its geothermal energy. This concept emerged after an announcement revealing that El Salvador has successfully mined 474 Bitcoins, valued at approximately $46 million, using geothermal power sourced from volcanoes.
Harnessing the Power of Volcanoes
In an intriguing social media post, President Bukele proposed the idea of a “rent your volcano to mine Bitcoin” program. With El Salvador boasting a remarkable 170 volcanoes, this initiative could offer a substantial energy source for global Bitcoin miners seeking cost-effective solutions. The President’s vision aims to attract international mining operations by providing an abundance of geothermal energy.
Daniel Alvarez, Director General of Energy, Hydrocarbons, and Mines, swiftly responded to the President’s proposal. He announced that his team would commence work on drafting a new geothermal law to facilitate and promote this ambitious initiative.
Endorsements from Top Bitcoin Advisors
Max Keiser, a prominent Bitcoin advisor to President Bukele, expressed enthusiastic support for the “rent-a-volcano” concept. Keiser emphasized that this initiative could propel El Salvador to the forefront of the global Bitcoin per capita (BPC) race. He further highlighted the significance of this metric, second only to security, in the world of cryptocurrency mining.
The Vision for Bitcoin City
El Salvador’s plan to harness its geothermal power is intricately linked to the ambitious Bitcoin City project. This visionary city is strategically located near a volcano and is designed to operate entirely on geothermal energy. The city will feature residential and commercial areas, restaurants, an airport, and a port and rail service. Importantly, activities within Bitcoin City, including Bitcoin mining, will be exempt from all taxes except for the value-added tax (VAT).
To finance this groundbreaking development, El Salvador introduced the “Volcano Bond,” also referred to as a Bitcoin-backed bond. This financial instrument represents a unique approach to funding the city’s infrastructure and operations.
Criticisms Prevail
Despite the boldness of the President’s actions, they have faced criticism from environmentalists who argue that volcano-generated energy may not meet the high demand of mining operations. Nevertheless, several international companies have seized the opportunity to invest in El Salvador’s geothermal potential. Notably, Tether announced a $1 billion investment in “Volcano Energy,” a company dedicated to constructing a 241 MW renewable energy generation park in Metapan.
This initiative aligns with El Salvador’s increasing Bitcoin holdings, which have experienced significant gains amidst a market rally. The country currently possesses over 6,000 BTC, with an unrealized profit exceeding $168 million. El Salvador’s journey into the world of cryptocurrency began in 2021 when it declared Bitcoin as legal tender, marking a transformative moment in its economic landscape.
