The name Nayib Bukele goes hand-in-hand with bitcoin. Officially, the Salvadoran president bet big on crypto. While most politicians just talk, Bukele acted by making Bitcoin legal tender in his country.
His is the first such large-scale national test of the cryptocurrency. In terms of politics, the experiment is his alone. In a situation where your political future depends on the outcome of a single big bet, what else can you do but double down? And that’s exactly what Bukele has done, with its new volcano mining operation being featured in the international media.
The president tweeted a teaser video of ‘first steps’ in September. In reality, the volcano mining operation, is run by a geothermal plant, which generates 107 megawatts of electricity. That’s right – 100-percent renewable energy provided by a volcano.
Around 5% of that energy is used to mine bitcoins, and the rest is applied to the country’s power grid. Bitcoin was introduced as an attempt to bring a portion of the unbanked -nearly 70% of citizens – into the financial system.
The president is also counting on Bitcoin-based revenue to finance a number of infrastructure projects, including a veterinary hospital and twenty modern schools.
When the move toward Bitcoin was first proposed, the IMF disapproved. Other organizations too were critical of the move not the least of which were due to environmental concerns. Cryptocurrencies, like Bitcoin, take a tremendous amount of computing power to mine.
Many have said that the process is not sustainable. In response, Bukele initiated a Bitcoin mining operation in the country utilizing geothermal power something that has been happening in Iceland for quite some time.
However, while some environmental groups complain that the carbon footprint of Bitcoin is just too high, others, like Joshua Rhodes, a research associate at the University of Texas at Austin, says that cryptocurrency mines can actually help make the power grid more reliable.
Increased demand makes it worthwhile for new sources of power to come online, and cryptocurrency mining is an industry that is incredibly flexible. Meaning that if there is high demand especially during an emergency such as a natural disaster, mining companies can power down and actually can help stabilize the situation in some areas.
Like avocados, which are being replaced in environmentally conscious circles, a dilemma surrounds Bitcoin. Those in the industry can simply fold up their tents and call it a day. The industry can ignore the environmental costs r we can get creative.
Admittedly, I’m not a farmer. I’m not sure how you can grow an avocado using less than 60 gallons of water or ship it without climate-controlled settings both circumstances dictate that the tiny fruit has an enormous carbon footprint. But for Bitcoin, there is a path forward.
The Covid-19 pandemic accelerated the digitization of the economy by leaps and bounds. Countries sped up their research and development timelines to launch CBDCs. Soon central banks across the globe will be issuing their own digital assets.
Now, it’s time that digital assets accelerate the development of sustainable energy production. While governments have been subsidizing renewable energy for years, a variety of factors have increased costs for those sources of energy, sparking public backlash among some sectors of the electorate. Cryptocurrency firms have the opportunity to flip the script.
Soluna, a cryptocurrency firm, is committed to building an enormous wind farm in Morocco to power operations nd now, geothermal energy is being used to power El Salvador’s newest venture, Bitcoin mining. There are ways to make cryptocurrency more sustainable.
It is up to the industry to continue to develop innovative new ways to make digital assets most feasible. After all, this is one of the most innovative industries in the history of the world. Blockchain technologies will fundamentally change the way the world interacts with money. If any industry can revolutionize how we think of sustainable energy, it is this one.
Author
Chris Munch is a professional cryptocurrency and blockchain writer with a background in software businesses, and has been involved in marketing within the cryptocurrency space. With a passion for innovation, Chris brings a unique and insightful perspective to the world of crypto and blockchain. Chris has a deep understanding of the economic, psychological, marketing and financial forces that drive the crypto market, and has made a number of accurate calls of major shifts in market trends. He is constantly researching and studying the latest trends and technologies, ensuring that he is always up-to-date on the latest developments in the industry. Chris’ writing is characterized by his ability to explain complex concepts in a clear and concise manner, making it accessible to a wide audience of readers.
