Stanley Estrada/AFP via Getty Images
The president of El Salvador announced Wednesday that the state’s geothermal utility will begin using the energy it generates from the volcano to mine Bitcoin.
The announcement on social media comes just hours after the Central American Congress voted to make cryptocurrency an acceptable payment.
“I recently instructed the president of @LaGeoSV (our state-owned geothermal electric company) to come up with a plan to offer a #Bitcoin mining facility with very cheap, 100% clean, 100% renewable, zero energy. Released from us, a volcano,” President Nayib Bukele tweeted. “This is evolving quickly!”
Bitcoin mining is getting very hot as it is harmful to the environment. This is because a lot of electricity is required to power the computers that generate the invisible currency.
But cryptocurrency advocates such as Twitter CEO Jack Dorsey say Bitcoin mining could lead to more renewable energy projects. such as a project announced in El Salvador.
How much energy are we talking about?
There is a decentralized ledger of Bitcoin transactions known as blockchain.
New entries in the ledger are created when someone — or instead of their computer — solves a complex mathematical puzzle to review previous transactions.
There may be a large payout. If you can solve any of the puzzles You will process the next block in that large ledger. And make your own money, or “mining” 6.25 Bitcoin, which is almost $230,000 today. plus any transaction fees
It appears that it takes a huge amount of computing power to run a very fast machine that solves these math problems and cools it when it overheats.
With Bitcoin miners located all over the world The total energy cost is enormous.
According to the Cambridge Bitcoin Electricity Index, global Bitcoin mining uses about 105 terawatt-hours of electricity per year. The university estimates that more than the total electricity used every year in the Philippines.
The revelation has sparked outrage over the high environmental costs of Bitcoin mining.
They also lead companies Let’s find a cleaner and cheaper way to mine precious cryptocurrencies. Forbes reports that a company called Northern Bitcoin has set up a data center in a former Norwegian metal mine. and use hydropower and wind power to operate computers. as well as cold water from nearby fjords to cool the unit.
with geothermal energy, for example, that is destined to be used in El Salvador. The scorching volcanoes heat the water underground. This generates powerful steam that can spin turbines and generate electricity.
El Salvador’s Bitcoin Experiment
El Salvador’s new law makes Bitcoin legal by including the US dollar as the only official currency in the country.
By law, about 70% of the country’s population does not have access. As a “traditional financial service,” President Bukele said he hopes Bitcoin legalization will help drive investment in the country and increase wealth for citizens.
The law also requires the government to provide “Training and Mechanism Needed” for Salvadorans to Access Bitcoin Transactions
It is unclear whether other countries will follow suit.
Critics have warned that the value of Cryptocurrency is volatile, and a spokesperson for the International Monetary Fund said that designating Bitcoin as a law “causes macroeconomic problems. A lot of financial and legal matters that require careful analysis.”