Opinion El Salvador is Investing in Sustainable Crypto Mining Technology

El Salvador is Investing in Sustainable Crypto Mining Technology

October 2, 2021

The name of El Salvador became a staple of crypto news in recent months. Now, the same country in Central America is taking its first steps towards developing a massive power source that will use only natural resources. The same power source will be then used to mine cryptocurrency, more precisely bitcoin tokens. The impact of that could extend itself a lot further than the domain of digital currency and its surrounding industries. Instead, it would be able to showcase a level of initiative from a poor nation that is mostly or completely free from the institutions and organizations that come with the oversight or direct control of superpowers of the world.

That alone is something worth having in mind not just for the present moment, but also for the future decades. In that timeframe, these initiatives could end up being the difference between a functional or even prospering nation in the underdeveloped world, and those which are drowning – sometimes literally – in waves of insurmountable problems. All of these problems will have to do something, one way or another, with energy production not just in those individual countries, but also across the globe.

Harnessing the Power of Earth

One of the most striking images to come out of El Salvador in recent days was an overhead shot of a geothermal power plant deep in the lush green jungles. It is generating energy thanks to the natural heat coming from the Earth’s core. That energy will go into the production of bitcoin tokens through a dedicated crypto mining facility. The president of El Salvador, Nayib Bukele posted a short video showcasing this plan on his social media accounts and it also showed workers installing a series of shipping containers. All of them house cryptocurrency mining computers, known as mining rigs, which will enter the bitcoin network.

The power for that mining will come from the same nearby geothermal plant. That means that no carbon footprint will come from the energy that these mining rigs use, making them reliant fully on a renewable source. This is an incredibly important element in any recent discussion about bitcoin or any other proof-of-work crypto mining discussion. Besides, in the age of digital social media, esports, and similar ventures, appearances matter as much as any substance of a particular subject. The President understands this as well, so he said that these were the first steps towards a – supposedly, nationally produced – bitcoin, tweeting out this message along with the jubilation of so many in the crypto community.

Deep-Rooted Skepticism

Since it started working, many have expressed a lot of skepticism about the bitcoin project in El Salvador. That included a range of issues with the state-provided digital wallets shortly after the launch of the program and the dispensation of 30 USD in BTC that the government sent to all eligible citizens. However, despite all of these, El Salvador still made bitcoin legal tender at the start of September. Now, a month later, things are still rolling on, even if that includes a lot of hiccups.

Also, the transition to mass bitcoin mining shows that the country is expanding its crypto footprint significantly. Bukele was adamant that the country is determined to use its resources of clean and renewable energy for the purpose of mining cryptocurrencies. The implications of that can be huge and not just in the domain of the crypto market, but also in the terms of geopolitics on a global level.

El Salvador’s Energy Potential

The small country of El Salvador lies on what is the Pacific Ring of Fire. That is a huge stretch of land and sea bed that is very prone to geothermal activity. Some of that is the chance for the dreaded earthquakes, but there are also many potentially active volcanoes in that stretch. El Salvador has 20 of these spots inside of its national borders. They are located throughout the entire country and could be fully harnessed by appropriate technology that turns their constant heat into electrical power without any need to burn fossil fuels. If all of these thermal sources are harnessed, they would be able to generate somewhere around 22 percent of the country’s needs for electrical power. That is a massive number because, for comparison, the US would in the same situation provide only 12 percent for its energy needs.

At the same time, the country does lie on the Pacific Ring of Fire as well. So, it is clear that El Salvador is exceedingly rich in terms of those energy sources and is free to exploit them inside of its own territory, without the need for things like offshore platforms and so forth. However, reaching these numbers is not going to be easy. Many of the same volcanic sites are very far from big centers of population like San Miguel or San Salvador. The sites also lie in inhospitable surroundings, so the same geothermal centers would need to be connected to a main electrical grid, often miles away from any geothermal location.

Crypto Mining Advantages

Unlike regular additions to the power grid, crypto mining facilities do not demand massive incoming and outgoing infrastructure investment. The mines can connect to the internet through the wireless network. It can communicate between the mining rigs and the rest of the BTC blockchain network. That way, a remote facility can work and utilize its power to generate BTC tokens and a profit for the country, but come with no insane infrastructure cost.

Potentially, the same facilities could be supplied through the use of small aircraft or even delivery drones, meaning that they would not even require regular maintenance or building of access roads. That too could cut the cost down drastically compared to any other deep jungle industrial venture, like rare metal mining operations and so forth. Of course, all of this comes from a short video from the president of El Salvador. The actual development of any of these volcanic sites will require a lot of time and effort, as well as money before they begin to churn out BTC tokens.