El Salvador has successfully mined 474 Bitcoin, valued at approximately $29 million, using geothermal energy sourced from the Tecapa volcano since 2021.
This initiative utilizes 300 mining processors and is part of a larger strategy to allocate 1.5 megawatts (MW) of the 102 MW produced by the state-owned geothermal power plant towards cryptocurrency mining. This approach positions El Salvador as a leader in adopting renewable energy for Bitcoin mining.
In 2021, El Salvador became the first country to legalize Bitcoin as an official currency, alongside the US dollar. Following this, the government continued to expand its Bitcoin initiatives, including the establishment of a geothermal power plant specifically for mining the cryptocurrency.
To date, El Salvador holds 5,750 BTC, which is worth around $354 million.
The country’s decision to adopt Bitcoin has faced significant international criticism, especially from entities like the World Bank. The criticism intensified during the 2022-2023 cryptocurrency bear market, raising concerns about President Nayib Bukele’s Bitcoin strategies. Despite this, Bukele reaffirmed his commitment to Bitcoin by promising to purchase one BTC daily and subsequently won the 2024 presidential election with considerable support.
The environmental impact of Bitcoin mining, particularly its traditional reliance on fossil fuels, remains a contentious issue. Organizations such as Greenpeace, backed by Ripple, have advocated for Bitcoin to transition from its current proof-of-work protocol to a less energy-intensive proof-of-stake protocol.
In legislative responses to these concerns, New York became the first U.S. state to enact a law banning proof-of-work crypto mining that does not use renewable energy, with a moratorium set for two years starting November 22, 2023.
Further, Tesla CEO Elon Musk, after initially buying $1.5 billion in Bitcoin and announcing it as a payment method for Tesla vehicles, reversed this decision citing the environmental toll of Bitcoin mining. He stated that Tesla would reconsider Bitcoin payments only if mining becomes predominantly powered by renewable energy. Recent reports suggest that over 60% of Bitcoin mining now uses renewable energy sources, although Musk has not yet responded to these developments or reintroduced Bitcoin as a payment method.
Tesla is also currently involved in a lawsuit alleging violations of the Clean Air Act, where it’s accused of emitting pollutants from its Fremont factory