El Salvador explores volcanic-fueled bitcoin mining – Boston Herald

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BERLIN, El Salvador – At a geothermal power plant near Tecapa volcano in El Salvador, 300 computers roar inside a trailer as they perform complex mathematical calculations day and night to verify transactions for the cryptocurrency bitcoin .

The pilot project inspired a wave of volcanic emojis from President Nayib Bukele, who made bitcoin legal tender in September, and promises of cheap renewable energy for the so-called “mining” of bitcoin. Such operations, including those on an industrial scale, have been harshly criticized elsewhere in the world for the massive amounts of electricity they use and the resulting carbon footprint.

Bukele and others say El Salvador’s geothermal resources – generating electricity from high-pressure steam produced by the volcano’s heat underground – could be a solution. But the situation in this small Central American country is more complicated.

“We do not spend resources that contaminate the environment, we do not depend on oil, we do not depend on natural gas, any resource that is not renewable”, Daniel Álvarez, president of the Rio Hydroelectric Executive Board Lempa, who oversees the plant, said during a tour on Friday.

Cheap electricity and a supportive government are the two key factors in attracting bitcoin mining operations, said Brandon Arvanaghi, a bitcoin mining consultant.

Two years ago, China supplied about three-quarters of all the electricity used for crypto mining, with operations flowing in to take advantage of its cheap hydropower. But the government started restricting mining, and in September declared all transactions involving bitcoin and other cryptocurrencies illegal.

This led to a rush to set up mining operations in other countries.

It would seem fortuitous to Bukele, who shocked the nation and many around the world by announcing last summer that bitcoin would be legal tender alongside the US dollar in El Salvador. The president sold the plan in part as a way for Salvadorans living abroad – mainly in the United States – to send money to their families cheaply. It also made him a darling in the bitcoin world.

But the launch was stormy. The digital wallet that Salvadorans had to use to perform basic transactions experienced a problematic rollout. Some users said they just wanted the $ 30 offered by the government as an incentive. There are continuing concerns that the digital currency, which claims to be controlled by no government, may invite criminal activity.

So far, the United States has been a big winner in attracting more bitcoin mining operations, especially the state of Texas, which has abundant renewable energy and a deregulated market.


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