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El Salvador Mines $29 Million in Bitcoin Using Volcanic Energy Amid Global Scrutiny and Environmental Debate

Since 2021, El Salvador has successfully mined 474 Bitcoin, valued at approximately $29 million, using the renewable geothermal energy harnessed from its Tecapa volcano.

The mining operation involves 300 processors and draws 1.5 megawatts from the 102 MW generated by a state-owned plant, as reported by Reuters.

El Salvador has taken significant strides in the cryptocurrency realm, especially in integrating renewable energy for Bitcoin (BTC) mining—a sector often criticized for its substantial energy consumption and reliance on fossil fuels.

This initiative places El Salvador at the forefront of sustainable BTC mining practices.

In a historic move in 2021, El Salvador became the first country to recognize Bitcoin as legal tender, on par with the U.S. dollar.

This decision was part of a broader strategy that included the development of a geothermal plant specifically for mining BTC.

Presently, El Salvador’s Bitcoin reserves amount to about 5,750 BTC, worth around $354 million.

However, the adoption of Bitcoin has not been without controversy.

Since its decision, El Salvador has faced intense criticism from global entities like the World Bank, mainly due to concerns about the implications of embracing a digital currency.

The skepticism intensified during the cryptocurrency bear market from 2022 to 2023, putting additional pressure on President Nayib Bukele’s pro-Bitcoin policies.

Despite this, Bukele reaffirmed his commitment to the cryptocurrency by promising the daily purchase of one BTC, a move that seemed to garner domestic approval as evidenced by his decisive victory in the 2024 presidential election.

The debate over Bitcoin’s environmental toll is ongoing within the broader crypto industry.

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Advocacy groups like the Ripple-backed Greenpeace have been pushing for Bitcoin to transition from the energy-intensive proof-of-work (PoW) model to a more energy-efficient proof-of-stake (PoS) framework.

This environmental concern led to legislative action, such as New York becoming the first U.S. state to enact a two-year moratorium on PoW mining, signed into law by Governor Kathy Hochul on November 22, 2023.

Elon Musk, Tesla CEO, briefly considered Bitcoin as a payment method for Tesla vehicles after purchasing $1.5 billion in Bitcoin.

However, Musk rescinded this decision, citing environmental concerns associated with Bitcoin mining.

He stated that he would reconsider only if the mining process became predominantly renewable, noting that recent reports indicate over 60% of BTC mining now utilizes green energy.

Despite these developments, Musk has not confirmed the reintroduction of Bitcoin payments. Meanwhile, Tesla is currently dealing with a lawsuit alleging violations of the Clean Air Act at its Fremont factory.

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Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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