El Salvador has embarked on an ambitious project that uses volcanic geothermal energy to mine Bitcoin (BTC).
El Salvador’s proposed Bitcoin mining could earn hundreds of millions of dollars each year, given the state of the current network, according to a leading miner.
Bitcoin in El Salvador
The country made history last month after becoming the first nation to recognize and classify Bitcoin as a “legal recourse”, allowing citizens to pay legally using the asset for all goods and services in the country, including any remittances sent to Bitcoin. outside.
However, it did not stop there. President Nayib Bukele revealed shortly after the move that the country was planning to harness geothermal energy from its active volcanoes to power Bitcoin mining platforms – using “clean” energy to do this while at the same time creating a revenue stream for the nation.
The plan is set to generate more than 95 MegaWatt (MW) of energy, enough to power a sizeable mine.
And this movement looks profitable:
“95MW can generate 3 Exahashes which, in the current Bitcoin network, is about 1800 Bitcoin in revenue per month or US$750 million per year,” said Bitfury founder George Kikvadze in a tweet.
He added: “I have no doubt that this will be the most profitable project in the HISTORY of El Salvador or Central America.”
Proof-of-work cryptocurrency mining involves using a massive computing system that solves millions of complex calculations every second to validate transactions over networks like Bitcoin.
Miners, in turn, are remunerated in BTC for the network, part of which is sold to cover costs and guarantee operation. Each block rewards 6.25 BTC (over US$216,000) starting in 2021, with the top miners generating revenues of millions of dollars a day.
These incentives are a blessing for countries like El Salvador (or any other). Harnessing natural resources can mean an additional source of revenue for the economy that improves livelihoods, provides jobs and increases tax revenue for the country.
Not everyone is on that path, however. China, formerly home to major mining operations, recently launched its latest round of regulation against Bitcoin-related activities last month.
This caused hundreds of miners to leave the country en masse, resulting in the “hash rate” plummeting to multi-year lows.