Recall that the President of El Salvador, Nayib Bukele made history, announcing El Salvador as the first country to accept Bitcoin as a legal tender. He didn’t stop there, he instructed a state-owned geothermal electric company to plan to use geothermal energy from the country’s volcanoes for mining for the cryptocurrency.
According to Bukele through a tweet; “I’ve just instructed the president of @LaGeoSV (our state-owned geothermal electric company), to put up a plan to offer facilities for bitcoin mining with very cheap, 100% clean, 100% renewable, 0 emissions energy from our volcanos.”
Zap’s Jack Mallers during the already ended Bitcoin 2021 Conference at Miami said the president will be passing a bill to make bitcoin a legal tender. The bill was approved by a “supermajority” gaining 62 out of 84 possible votes within the Central American country’s congress.
El Salvador Bitcoin Mining Energy Solution
Experts believed the energy required to allow the operation in El Salvador to mine as much bitcoin to make it a legal tender will require nearly as much energy as the entire country of Argentina. Citing high energy and fossil energy as a major concern, Bukele in another tweet, Bukele explained that the country’s engineers have dug a new well to provide around 95 MW of 100 percent clean – zero-emission – geothermal energy from the volcano.
Bitcoin mining across the globe
First, bitcoin mining is a process of generating new units of virtual currency. It involves solving complex mathematical equations, requiring energy-intensive computer operations.
Seeing it as a limitation, China has previously banned it. Despite that, a majority of mining operations still take place in the country and the problem is exacerbated since two-thirds of the power to perform the computations comes from coal.
The University of Cambridge in a research article noted that the bitcoin network consumes as high energy as 121 terawatt-hours (TWh) annually. The figure ranked bitcoin energy consumption as the 30 electricity consumers worldwide assuming it were a country.
Recently, Elon Musk the CEO of Tesla announced the company which declared it would be accepting bitcoin for tesla cars made reverse to say they are no longer receiving bitcoin as a payment mode. He said; “We are concerned about the rapidly increasing use of fossil fuels for Bitcoin mining and transactions, especially coal, which has the worst emissions of any fuel.”
While everyone agreed that energy concerns are a top consideration, experts said access to cheap renewable energy would enable miners to gravitate towards them for clean production of the cryptocurrency.
Cryptocurrency miners in countries like Iceland and Norway are already utilizing cheap hydroelectric and geothermal energy to power their mining rigs. Concurrently, Don Wyper, COO of DigitalMint, had told the Independent in May;
“In its current status, the infrastructure that supports the bitcoin protocol cannot be sustained, but the beauty of the protocol is that the incentive structure will force miners to adopt the cheapest form of electricity, which soon will be renewable energy.”