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El Salvador, since 2021, has mined a total of 474 Bitcoins worth 29 million dollars using volcanic geothermal energy. The mined Bitcoin was produced by 300 mining processors powered by the Tecapa volcano. According to Reuters, the country allocated 1.5 megawatts (MW) of the 102 MW generated by the state-owned power plant to cryptocurrency mining.
El Salvador and Bitcoin
Bitcoin mining’s reliance on electricity and fossil fuels has faced increasing scrutiny, and El Salvador has emerged as a pioneer in renewable energy mining. In 2021, El Salvador made history by becoming the first country to adopt Bitcoin as legal tender alongside the US dollar. Since then, the government has implemented various Bitcoin-focused policies, including establishing a geothermal facility for Bitcoin mining.
El Salvador currently owns a total of 5,750 Bitcoins, including the 474 Bitcoins mined, estimated to be worth 354 million dollars. The Central American country has faced significant criticism from global organizations like the World Bank since its adoption of Bitcoin in 2021.
The bear market in 2022-23 intensified scrutiny, and many questioned President Nayib Bukele’s actions. However, Bukele doubled down on his Bitcoin stance by announcing that the country would buy one Bitcoin every day. Bukele won the presidential elections earlier this year, largely on promises to implement Bitcoin as a legal payment method and eliminate crime.
Mining and Environmental Issues
Bitcoin mining and fossil fuel use remain a long-standing controversial topic in the crypto industry. The Ripple-backed Greenpeace group, among others, has advocated for Bitcoin mining consensus to shift from proof-of-work to proof-of-stake. US lawmakers have taken further steps by banning Bitcoin mining in multiple states.
Tesla CEO Elon Musk promised to include Bitcoin as a payment method for Tesla cars after purchasing 1.5 billion dollars worth of Bitcoin. However, he retracted his decision within days, citing the negative environmental impact of mining. Musk stated he would reconsider this move only when more than 50% of Bitcoin mining operates on renewable energy sources.
Musk has since been presented with numerous reports suggesting that over 60% of Bitcoin mining relies on renewable energy sources. Musk has not yet acknowledged these reports or implemented a Bitcoin payment option. Despite presenting himself as an environmentalist, his company faces lawsuits for repeatedly violating the Clean Air Act by releasing harmful pollutants from the Fremont factory into nearby neighborhoods.
