Info-tech

El Salvador sees greener cryptocurrency mining in its future

Reuters San Salvador | Updated on October 17, 2021

Was the first country to adopt bitcoin as legal tender

El Salvador’s unfolding experiment as a first-adopter of the cryptocurrency bitcoin could be increasingly powered by new streams of renewable energy, the Chief of the country’s hydroelectric commission told reporters on Friday.

Energy-intensive cryptocurrency “mining” is done by computers, and has come under criticism from environmentalists as a big source of demand for mostly fossil fuel derived electricity.

Legal tender

Last month, El Salvador became the first country to adopt bitcoin as legal tender alongside the US dollar, which for years had served as the country’s sole official currency.

Daniel Alvarez, President of the State-run Lempa River Hydroelectric Executive Commission (CEL), said El Salvador has the potential to generate electricity through hydroelectric, solar, wind and tidal power projects.

“The possibilities are endless here, it’s just about willpower and that we have the means and the ability to start these projects,” Alvarez said.

Geothermal energy

The Salvadoran government in September began harnessing geothermal energy for bitcoin mining from a plant at the base of the Tecapa volcano, 106 kilometres east of the capital, that is owned by a company which is a part of CEL.

The plant generates about 102 megawatts, and the government plans to add another five megawatts next year. At present, 1.5 megawatts are being allocated for bitcoin.

Also see: US Treasury puts crypto industry on notice over rising ransomware attacks

Alongside the plant, officials have set up a room inside a shipping container to house 300 computers that process cryptocurrency transactions.

The Tecapa plant and another geothermal plant in north-western El Salvador, supply between 23 per cent and 24 per cent of the national power grid, according to authorities.

Published on October 16, 2021

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