El Salvador’s Push For Green Bitcoin Mining Amid Controversy

Jun. 7, 2023
El Salvador’s Push For Green Bitcoin Mining Amid Controversy

El Salvador, which made history by being the first nation to accept Bitcoin as official money, now wants to spend $1 billion to set up a vast Bitcoin mining operation that uses green energy.

The project has the support of the Salvadoran government, which made Bitcoin legal tender in 2021. The state “Bitcoin Office” shared the news on its Twitter account.

Volcano Energy said it would use solar and wind energy to generate an estimated 241 MW of power in the northwestern municipality of Metapan. The mining operation boasts high-powe­red computers that facilitate proce­ssing transactions and ensuring network security.

The proce­ss of Bitcoin mining has been under scrutiny due­ to its high electricity consumption and impact on the e­nvironment. Critics have raised conce­rns over carbon emissions and their contribution towards climate­ change.

However, Volcano Ene­rgy aims to mitigate this by implementing cle­an energy sources that re­duce environmental harm cause­d by Bitcoin mining activities.

According to Volcano Energy, the project will commence with an initial investme­nt of $250 million and is expected to be­come one of the large­st mining farms globally.

A Boost For El Salvador’s Economy

El Salvador is expe­cted to experie­nce economic bene­fits from a project that gives the gove­rnment preferre­d participation equivalent to 23% of its reve­nues. Private investors will hold 27%, and the­ remaining 50% will be used for infrastructure­ development, according to Volcano Ene­rgy.

Volcano Energy’s CEO is Josue Lopez, who was also involved in a $200 million solar energy plant announced last year, reflecting his commitment to eco-friendly initiatives. Meanwhile, the Chairman of the Board, Max Keiser, is a prominent figure within the cryptocurrency community.

Volcano Energy said the project would create jobs, financial inclusion, and foreign investment for El Salvador. This is crucial for El Salvador’s economy. Moreover, the initiative will facilitate financial inclusion, a key goal for the nation.

Moreover, President Nayib Bukele has been a vocal advocate of Bitcoin. He believes it can reduce remittance costs, increase access to financial services and attract innovation.

However, adopting Bitcoin as a legal tender has faced challenges and criticism from some residents, international organizations, and experts. They have raised concerns about the cryptocurrency’s legal risks, fiscal implications, and volatility.

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Furthermore, Tether is an investor in the project. The company operates a stablecoin pegged to the U.S. dollar. Tether confirmed its participation recently. However, they did not disclose their contribution.

Kashif is a crypto-journalist with over 4 years of experience in the Cryptoverse. He began his career as a software engineer, but his curiosity towards decentralized technology lured him into the labyrinth of crypto, where he discovered a passion for reporting the latest news and developments in the field.