On the eve of the President of El Salvador Nayib Bukele posted on Twitter a video of the first geothermal power plant in the country, which was converted into a mining center.
Now Bukele shared his first successes after the launch of the project: the electricity produced using the bowels of the earth is already making a profit for the state in the form of bitcoins. At the same time, the cryptocurrency itself became a legal tender in El Salvador in early September. Let’s talk about what is happening in more detail.
Bitcoin was recognized as a full-fledged means of payment in the country on a par with the dollar on September 7, 2021. This allows users to pay at local establishments in BTC using the Lightning Network with low fees.
However, the country’s President Nayib Bukele decided not to stop there. Therefore, he launched a BTC mining project using geothermal energy. This means that, in essence, the costs in this case will only require equipment and its maintenance.
And now this project has been implemented – albeit on a small scale.
How does El Salvador mine bitcoins?
A screenshot of the amount of coins mined since the refurbishment of the power plant appeared on the Bukele Twitter page – the government of El Salvador mined almost $ 500 worth of bitcoins . This is a small amount, but in the beginning it would still have to go through it.
The President clarified that the mining center, the video with which has already gained more than 2 million views, is still in the stage of setting up and testing. According to him, the project also brings in the first BTC produced with the help of energy from the heat of volcanoes.
The environmental friendliness of this method of mining bitcoins is a very important point, since more and more people have recently criticized the main cryptocurrency for its bad impact on the environment. To be more precise, it is thermal power plants that cause harm to the environment, which provide miners with the necessary resource by burning various fuels.
Bukele has big ambitions for Bitcoin adoption, which is why he is ready to innovate in the country with a focus on environmental protection. However, if the latter saves him from environmental criticism, the former still provokes resistance from a significant part of the local population of El Salvador. Recall that almost half of the Salvadorans consider the adoption of BTC as a legal tender in the country «not the most successful decision.» Moreover, the adoption of the crypt is even criticized by large international organizations.
Note that representatives of a local public organization were even outraged by the fact of purchasing cryptocurrencies for money from the state budget. In this regard, they demanded an audit of the acquisition of coins. Most importantly, it is still unknown who controls the country’s cryptocurrency wallets.
In an interview with Decrypt, an anonymous businessman from El Salvador noted that although Bitcoin, according to the president, is an alternative and not a mandatory means of payment, local companies are still obliged to settle in it if their clients insist on it. Here is a quote from him.
The government is targeting both large and small businesses. They sent government agents to check businesses to make sure they were complying with labor laws just because senior executives spoke out negatively about Bitcoin’s adoption law.
Note that the country’s initiative was supported by the head of MicroStrategy, Michael Sailor, which has more than 114 thousand bitcoins at its disposal. As Michael pointed out, getting the first million Satoshi is always the hardest thing.
Congratulations. The first million sats is always the hardest.
– Michael Saylor ⚡️(@michael_saylor) October 1, 2021
We believe that the initiative of the El Salvadorian leadership will eventually become a historic event. Mining Bitcoin with clean energy sources is a brilliant idea that can significantly improve the reputation of a cryptocurrency. Most importantly, due to the relatively small size of the economy, the government can afford to take risks to a much greater extent than the United States, China and other giants. We hope that these countries will also join mining in the future.
How successful El Salvador’s Bitcoin mining initiative will be – time will tell. If the government can still provide itself with cheap electricity for mining, this could be a beneficial economic incentive for the entire country.