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El Salvador mines the first Bitcoin with volcanic energy

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El Salvador used the energy of a volcano to mine 0.00599179 Bitcoin, or about 269 US dollars. This is the country’s first foray into Bitcoin mining with volcanic power, President Nayib Bukele tweeted at the end of the week. “We’re still testing and installing, but this is officially the first bitcoin mining from a volcano.”

Previously, Bukele already had posted a 25 second video, which shows shots of a government container full of Bitcoin mining rigs, technicians installing and connecting ASIC miners, as well as sweeping landscape shots of a geothermal system on the edge of a volcano. The video, which has already been viewed more than 2.4 million times, is simply titled “First Steps …”.

When the Bitcoin law was announced in June, Bukele had said that he had instructed the state geothermal energy provider LaGeo to provide operators of Bitcoin mining facilities with cheap electricity tariffs. The goal: to attract Bitcoin miners with cheap electricity from geothermal energy. Among other things, a new system is available that can supply miners with 95 megawatts of renewable and emission-free electricity from geothermal energy, promised Bukele at the time.

El Salvador is also known as the “land of volcanoes”. According to official figures, geothermal energy already accounts for almost a quarter of domestic energy production. El Salvador’s step to mine Bitcoin with the help of geothermal energy is also due to the attempt to help the cryptocurrency gain more acceptance. Most recently, crypto mining has drawn criticism from governments and experts who are increasingly concerned about its environmental impact. In Bitcoin mining, new bitcoins are created with the help of computers that solve complex mathematical problems and require a large amount of energy to do so.

Bitcoin has been the official means of payment in El Salvador since September 7th. The corresponding law stipulates that every merchant who is technically capable of accepting payments in the cryptocurrency has to accept. Taxes can also be paid in Bitcoin. El Salvador’s government hopes that this will provide better access to payment systems for the poor and easier money transfers from foreign Salvadorans. About three million Salvadorans live overseas, including 2.5 million in the United States. Overall, remittances account for 22 percent of the country’s GDP.

However, critics do not consider this argument to be particularly valid. Rather, access to financial services means having reliable savings options, access to credit on reasonable terms, as well as access to insurance or other financial products, says the political scientist and Central America expert Christian Ambrosius from the Free University of Berlin. Because of the large fluctuations in the value of the cryptocurrency, he also sees dangers for monetary stability. In addition, there is a lack of transparency and the risk of money laundering.

There are also increasing protests against President Bukele and his Bitcoin law among the population. On the 200th anniversary of the country’s independence in mid-September, thousands demonstrated against the introduction of Bitcoin as a means of payment and against a recently passed constitutional reform that would enable Bukele’s direct re-election in 2024.


(acn)

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