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NEW DELHI: Hours after passing a resolution making it the first country in the world to recognize bitcoin as legal tender, Latin American country El Salvador said it would mine the cryptocurrency using the geothermal energy from its volcanoes.
In a tweet, President Nayib Bukele said: I just asked the president of @LaGeoSV (our state-owned geothermal power company), to put in place a plan to offer facilities for bitcoin mining with a very cheap, 100% clean, 100% renewable, 0 energy emissions from our volcanoes. “
El Salvador, in a historic move on Wednesday, became the first country in the world to officially adopt bitcoin as legal tender. The Congress of Nations approved Bukele’s proposal to adopt the cryptocurrency with 62 out of 84 possible votes.
El Salvador was one of the few countries in the world that did not have its own fiat currency and used the US dollar, which will always remain legal tender in the country.
In another tweet Thursday, Bukele said engineers across the country have dug a new well that will provide around 95 MW of 100% clean, zero-emission geothermal power from the volcano. Start designing a full bitcoin mining hub around it, ”Bukele tweeted with a video, showing water vapors gushing out of a well.
El Salvador has decided to mine bitcoin using green energy amid criticism of cryptocurrencies over its environmental impact. According to the Cambridge Bitcoin Electricity Consumption Index, the world’s largest digital asset uses more energy than countries like Sweden and Malaysia.
Amid concerns over the increasing use of fossil fuels for bitcoin mining, Tesla chief Elon Musk halted vehicle purchases with bitcoin last month.
The very energy intensive nature of bitcoin is due to the protocol it uses in the mining process. Major cryptocurrencies such as Bitcoin and Ethereum use Proof of Work (PoW) to verify transactions on the blockchain. This process uses an advanced form of mathematics, which only powerful computers can solve, resulting in a heavy use of electricity.
Musk’s reprimand along with China’s shutdown of bitcoin mining operations over concerns over energy consumption has affected sentiment in the crypto market.
Over the past three months, bitcoin has been lagging behind in terms of the performance of the S&P 500 and gold. Additionally, digital assets have fallen about 44% from their all-time high of $ 64,804.72 reached on April 14, 2021.
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