El Salvador Pioneers Renewable Energy Bitcoin Mining Amid Global Scrutiny

15. May 2024 Posted by Laurent C. on News

El Salvador currently holds 5,750 BTC valued at $354 million, amassed over three years. Since 2021, the country has mined 474 Bitcoin worth $29 million using geothermal energy from volcanic sources.

The Bitcoin mining operation utilizes power from the Tecapa volcano, employing 300 mining processors. El Salvador has dedicated 1.5 megawatts (MW) to cryptocurrency mining out of the 102 MW generated by the state-owned power plant, according to Reuters.

Amid rising concerns over Bitcoin mining's energy consumption and fossil fuel dependence, El Salvador has positioned itself as a leader in renewable energy-based mining.

In 2021, El Salvador became the first country to adopt Bitcoin as legal tender, alongside the US dollar. The government has since implemented several Bitcoin-centric policies, including setting up a geothermal plant specifically for Bitcoin mining.

Despite facing criticism from global organizations like the World Bank since adopting Bitcoin, and enduring intensified scrutiny during the 2022-2023 bear market, President Nayib Bukele has remained committed to Bitcoin, even pledging to buy one BTC daily.

Bukele secured a decisive victory in the 2024 presidential election, reflecting widespread national support. Bitcoin mining's environmental impact continues to be a contentious issue within the crypto industry.

Organizations like Ripple-backed Greenpeace have called for Bitcoin to transition from proof-of-work (PoW) to proof-of-stake (PoS). In November 2023, New York Governor Kathy Hochul signed a two-year moratorium on PoW crypto mining, making New York the first US state to enforce such a ban.

Tesla CEO Elon Musk had initially pledged to accept Bitcoin as payment after purchasing $1.5 billion worth of BTC. However, he retracted this decision, citing environmental concerns, and stated he would reconsider only if over 50% of Bitcoin mining used renewable energy.

Since Musk's statement, reports indicate that more than 60% of Bitcoin mining now relies on renewable energy. Despite these developments, Musk has not reinstated the BTC payment option, and Tesla faces a lawsuit for alleged violations of the Clean Air Act due to pollutant emissions from its Fremont factory.