When the announcement was made that El Salvador would officially make Bitcoin legal tender, the move was considered a bold, innovative one. President Nayib Bukele went one step further, claiming that clean geothermal energy from the country’s numerous volcanoes would be used to aid in the mining of said Bitcoin as well. On October 1, 2021, Bukele tweeted the first success in this attempt: 0.00599179 bitcoin – about $269 – mined using energy harnessed from a volcano.
— Nayib Bukele ???????? (@nayibbukele) October 1, 2021
Bitcoin mining is an incredibly high-energy process, comparable to entire countries’ worth of electric consumption! In fact, its energy usage has been equated to the annual carbon footprint of Argentina. The mining process is essentially the solution of complex math problems – upon solving the algorithms, ‘miners’ are rewarded in bitcoin. The more bitcoin mined (with a finite number of 21 million), the harder the algorithms are, and the more energy is required to solve them. A simple computer cannot handle the solution, and the mining process has now evolved to using special computer equipment and massive electrical power sources to obtain the cryptocurrency.
As bitcoin and other cryptocurrency only seem to be growing in popularity, the issue has been how to reduce its significant carbon footprint. When El Salvador announced bitcoin as legal tender, “cheap, clean” geothermal energy from its volcanoes was cited as a potential fuel source.
— Nayib Bukele ???????? (@nayibbukele) September 28, 2021
The country’s state-owned geothermal electric company LaGeo SA de CV would be tapped to create the “clean” plan. Less than a full month after bitcoin became legal tender in this tiny Central American country, President Bukele proudly announced the first of its many successes.
Geothermal Energy and How it Works
Geothermal energy uses the heat trapped beneath the Earth’s surface to generate electricity. This heat is found in rocks, fluids and as far below as earth’s magma (hot molten rock). When it comes to volcanic geothermal energy, the heat comes from what is called “supercritical water” – an even more high-energy source brought about by extreme heat and pressure when molten rock and water meet. Neither liquid nor gas, the “water” from this combination carries far more energy than normal steam, providing up to 10 times the power of other geothermal sources.
Geothermal energy has been used to produce electricity in over 20 countries, including the US and Iceland. As a renewable, sustainable source of energy that can provide uninterrupted electric power for something so energy intensive as bitcoin mining, geothermal energy seems to be the answer.
While Bukele has indicated that they are in the process of “testing and installing” new mining equipment, it seems that once again, El Salvador is leading the charge in innovation throughout the region.
To discover more about this incredible country in Central America, download our El Salvador Handbook now!