Most people know El Salvador for its coffee and perfect beaches. However, the country may soon become famous for something else entirely: Bitcoin City. This past summer, El Salvador’s President Nayib Bukele declared that bitcoin, the first cryptocurrency, would become legal tender in the country. Government subsidized chivo wallets launched in September along with many implementation problems and protests. Whether for it or against it, it will be interesting to see how this energy initiative plays out over time.
El Salvador’s Nickname is Land of Volcanos
El Salvador’s president, Nayib Bukele, plans to build a Bitcoin City at the base of the Conchaga volcano. The city will have the shape of a large coin and will use the volcano’s geothermal energy to power bitcoin mining. El Salvador’s nickname is the Land of Volcanos because it has more than 100 of them with around 20 still active. Sounds like plenty of power.
Initially funded by bitcoin-backed bonds, the city will be built near the active volcano. The heat generated from the volcano could provide cheap energy to power bitcoin mining computers. If this plan works out, it could serve as an example for other countries worldwide looking to reduce their dependency on fossil fuels.
Why Even Do This?
Throughout El Salvador’s history corruption and war have plagued the country with economic uncertainty. So, it is hard to imagine leaving behind El Salvador’s other official currency, the US dollar. The volatility of bitcoin would seem like the country is going in the opposite direction to gain stability and earn back the peoples’ trust.
However, the initiative could create thousands of jobs in the city using the cryptocurrency, which would then get accepted for government services for workers. “We are about to create the first city in the world where the government works 100% with digital currency,” said Mauricio Castillo, director of the Salvadoran Ministry of Communication and Technology.
The government plans to build 50 houses in the first phase of the new city on the mountaintop, each costing $100,000 and powered by alternative geothermal energy. Castillo added: “We are going to create a city with alternative sources of energy in the area’s epicenter that was hit by the eruption.” El Salvador has become a hot spot for bitcoin mining as they can do it more cheaply there than in other countries. They plan to use the alternative energy for cryptocurrency mining and as well for alternative power distribution.
This move is part of a larger strategy by leaders in Latin American countries looking for ways to diversify their economies away from traditional industries like agriculture or mining.
What Are the Effects?
El Salvadorans have created a plan to transform the city using only alternative energy sources and construct using eco-friendly construction materials. Plans include building what will become known as “Bitcoin City” in the rural town of San Juan Nonualco. This alternative energy-powered colossus will feature two luxury hotels, an 18-hole golf course, homes and apartments, an amphitheater, and a 10 MW geothermal power plant.
The volcano will power everything. The entire complex will get power from the nearby, but recently awakened, volcano. Bitcoin City will also include a university for alternative energy technology and a digital currency institute. This project intends to build a city that is self-sufficient through alternative energy means.
The country of El Salvador is no stranger to alternative energy, alternative fuels, alternative medicine, and more. This may be one of the more extreme measures they have taken towards alternative energy to reduce their dependency on fossil fuels and reliance on other countries for resources.
Geothermal energy is a viable alternative to fossil fuels, as it is clean and relatively limitless.
According to the U.S. Department of Energy’s website,
- Energy can be extracted without burning a fossil fuel such as coal, gas, or oil. Geothermal fields produce only about one-sixth of the carbon dioxide that a relatively clean natural-gas-fueled power plant produces, and very little if any, of the nitrous oxide or sulfur-bearing gases. Binary plants, which are closed cycle operations, release essentially no emissions.
- Geothermal energy is available 24 hours a day, 365 days a year. Geothermal power plants have average availabilities of 90% or higher, compared to about 75% for coal plants.
- Geothermal power is homegrown, reducing dependence on foreign oil.
Because its source is the almost unlimited amount of heat generated by the Earth’s core. Even in geothermal areas dependent on a reservoir of hot water, the volume taken out can be reinjected, making it a sustainable energy source.
When Is This Going to Happen?
The country on the Pacific coast of Central America direly needs alternative energy. The rural areas are plagued with frequent blackouts, while the capital San Salvador suffers frequent power cuts during peak hours. People expect the ambitious project to be completed in 2023 and aims to generate 6.5 MW of electricity.
Is Geothermal the Answer?
Currently geothermal energy is not a viable replacement for fossil fuels in most parts of the world. But it is an alternative energy source that can help with some problems. Most people who have studied various forms of alternative energy agree the energy source needs to be at least 10x cheaper than fossil fuels or nuclear power to become mainstream.
Energy sources like geothermal, wind, hydro, and solar are relatively inexpensive. However, when you count in all their costs (construction, operation, maintenance, replacement), the short term expenses can add up. But, for the sake of the air, the environment, and the future of our planet, the Bitcoin City project will be an interesting one to follow.
To learn more about the resources needed to mine bitcoin, check out our recent article The Power Behind Bitcoin.
If you, like many others, have concerns over emissions and use of fossil fuels, let us know. Brilliant Source’s renewable energy solutions can help you reach your sustainability goals, save money, and become an industry leader as alternative energy sources are now within reach.
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