The post El Salvador’s President Weighs In Renting Volcanoes To Mine Bitcoin appeared first on Coinpedia Fintech News
In a latest development, El Salvador’s President Nayib Bukele, has hinted at an innovative plan to enhance its Bitcoin mining operations. Notable, this idea was sparked through an X post which highlighted that El Salvador has mined 474 Bitcoins now worth $46 Million using volcano -fueled geothermal power.
To which, the President proposed a unique idea noting –
“And with 170 volcanoes…A “rent your volcano to mine Bitcoin” program might actually make sense.”
To enhance its Bitcoin mining operations Nayib Bukele suggested this unique idea of renting out the country’s volcanoes to miners. Bukele underscored that with the nation’s 170 volcanoes, it could provide a vast energy source that could attract global miners looking to cut costs.
Notably, Daniel Alvarez, Director General of Energy, Hydrocarbons, and Mines, reacted promptly to the President’s that his team will begin working right away, on the new geo-thermal law to promote the initiative.
Also, Max Keiser, a senior Bitcoin advisor to the President, lauded the idea, and noted- “El Salvador’s rent-a-volcano to mine Bitcoin will put it in the lead in the global Bitcoin per capita (BPC) race.”
El Salvador’s plan to tap its geothermal power led to the idea of the ambitious Bitcoin City project. The city, located near a volcano, is expected to be powered by geothermal energy, exempting all of its activities, including Bitcoin mining, from all taxes except for the value-added tax. It is designed to be a full-fledged metropolis, with residential and commercial areas, restaurants, an airport, and a port and rail service.
Notably, to finance the development of the city, El Salvador even introduced a “Volcano Bond,” also called a Bitcoin-backed bond.
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Criticisms Prevail
The president’s actions have been condemned by ecologists before, who argue that volcano-generated energy will not be able to sustain the demand from mining operations. Despite, some foreign companies have entered the country to take advantage of its more than 170 volcanoes. In June 2023 Tether announced its participation in a $1 billion investment in “Volcano Energy,” a company building a 241 MW renewable energy generation park in Metapan.
Notably, this initiative coincides with El Salvador’s Bitcoin stash achieving gains amidst the ongoing market rally. The country holds over 6,000 BTC with an unrealized profit over $168 million. The country began stockpiling Bitcoin in 2021 and also declared it as a legal tender in the same year.
FAQs
El Salvador’s Bitcoin holdings are currently worth around $200 million, based on recent market prices, but this fluctuates with Bitcoin’s volatility.
Yes, El Salvador used Bitcoin as part of its strategy to pay off debt, including a $800 million bond redemption in 2023, leveraging Bitcoin’s price appreciation.