December 10, 2022

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El Salvador Project: Bitcoin Mining with Volcanic Energy?

Status: 10.06.2021 12:45 p.m.

Completely clean, completely renewable: El Salvador’s President Naib Boukel plans to mine bitcoins with the help of energy from volcanoes. In this way, the country wants to control its high energy consumption.

El Salvador wants to use geothermal energy from volcanoes for the energy-intensive mining of the crypto currency bitcoin. President Naib Bukhe tweeted that the government had appointed Lazio, a state-run geothermal power company, to develop a related project.

The President firmly believes that it is very cheap, 100 percent clean and renewable, will not generate any emissions and will evolve quickly. El Salvador has more than a dozen volcanoes, many of which are still active.

Huge energy requirements

The very high energy demand of the bitcoin mine has long been publicly discussed critically. The Cambridge Center for Alternative Funds (CCAF) operates on this topic and has developed a code for it.. The Cambridge Bitcoin Power Consumption Table should estimate in real time how much electricity is currently being used for mining.

The data is then expanded year on year. The calculated value is currently 111 terawatt hours. This is similar to the annual electricity consumption of the Netherlands. According to the Federal Environmental Organization, Germany consumed about 553 terawatt hours by 2020.

According to a study by Bank of America, the global bitcoin industry emits a total of 60 million tons of CO2 per year, which is equivalent to the emissions of about nine million cars.

Bitcoin as a means of payment …

A few days ago, Buckell announced that El Salvador was the first country to introduce bitcoin as a legal tender.. He expects the move to create thousands of new jobs in the Central American country. Among other things, you can pay taxes on Bitcoin.

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Bitcoin is the most popular digital currency. It was not issued by a central bank, but was developed using a decentralized computer process called mining. It is by no means clear whether this is appropriate even as a means of payment.

… or the subject of speculation?

So far, cryptocurrencies have attracted mainly speculative value, subject to extreme fluctuations: Bitcoin was quoted more than $ 55,000 on May 10, and currently stands at 36 36,000. If the value of a portion of the revenue is subject to such strong fluctuations within a very short period of time, this poses a number of problems for state budget policy.

High volatility of cryptocurrencies is an incalculable risk for companies. For example, American electric car maker Tesla launched in March this yearAccepting Bitcoin as a means of paying for its vehicles The move changed after a while.

As a justification, Tesla boss Elon Musk cited “crazy” energy consumption expectations. But Musk, as an entrepreneur, can at least keep these price fluctuations in mind.