Financial Insights That Matter
Cryptocurrency mining in El Salvador has been significantly successful in recent months, and it’s powered by a surprising source of energy: Earth itself.
According to a report by Cryptopolitan, the small Central American nation has mined 474 bitcoin — worth a whopping $29 million — in the last three years, and its facilities are powered almost entirely via geothermal energy.
The operation has 300 machines and runs entirely on the geothermal steam energy of the Tecapa volcano. The state-run energy facility attached to the volcano produces 150 megawatts of power, and the state diverts 1.5 megawatts of that energy solely to the cryptocurrency facility.
El Salvador gained fame in 2021 for becoming the first country to adopt bitcoin as an official legal tender, according to Reuters. President Nayib Bukele is a noted proponent of cryptocurrency in general and bitcoin in particular and created a bitcoin office to help mine and promote it.
Cryptocurrency remains a hot-button topic, largely because of the environmental impact it can have in an area. Scientists have repeatedly pointed out that mining the digital currency uses tremendous amounts of power, and, when done irresponsibly, can have a massive impact on ecosystems. On top of that, the power often comes from dirty energy sources such as coal and gas, which pump carbon into the atmosphere and directly contribute to our planet’s warming.
Many areas have resisted the construction of crypto mining facilities because of their impacts on the environment. There are movements to reduce cryptocurrency’s impact, but those processes are in the early stages. One notable initiative is happening with researchers from Stanford University, who have released an app to mine cryptocurrency that significantly reduces the energy used to harvest the currency.
El Salvador, however, shows how bitcoin mining can be done in a socially and environmentally responsible way, which gives hope that we can find more ways to take part in the practice responsibly.
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