El Salvador becomes the first country to adopt Bitcoin as its legal tender. This law was accepted by 62 out of 84 possible votes within Central American country’s congress.
El Salvador’s president Nayib Bukele confirms that a state-owned geothermal company has been instructed to use geothermal energy from the country’s volcanos to mine Bitcoin.
Concerns about crypto mining
Many countries around the world are against Bitcoin mining because of the carbon emissions/footprint. Experts point out that the underlying technology used to mine cryptocurrency consumes electricity equivalent to what is being consumed by Argentina. Major cryptocurrencies like Bitcoin and Ethereum use Proof of Work (PoW) to verify transactions on the blockchain network. Mining these coins would require complex mathematical procedures to create new coins and will also consume massive amounts of computational power and electricity.
China has already banned the process of Bitcoin mining. It has also been found that the bitcoin network consumes over 121 terawatt-hours annually. Elon Musk, the founder of SpaceX and Tesla strongly admits that he is very concerned about the fossil fuel used to mine Bitcoin, especially coal, because of its excessive carbon emissions. Musk also mentioned that this was the reason for Tesla to stop receiving Bitcoin as payment. Because of these two events, BTC has been experiencing a significant loss in terms of returns from the S&P 500 and gold. This digital value of BTC fell to 44% from its all-time high (ATH) value of $64, 804.72 in mid-April, 2021.
Alternative approaches towards crypto mining
El Salvador’s president confirms that the country’s engineers have dug a new well that is capable of producing around 95 MW of 100% clean, emission-free electricity from the geothermal energy of the volcano. This environmentally friendly way of mining cryptocurrency against various existing criticisms, concerns and environmental impact, took the market by surprise.
Experts have found alternative ways to mine cryptocurrencies that are cheap and renewable. This will enable the miners to produce clean cryptocurrencies with considerably fewer emissions. Many countries like Iceland and Norway have now adopted hydro-electrical and thermal power to mine cryptocurrencies.