El Salvador Pioneers Sustainable Bitcoin Mining; Musk's Crypto Decisions Questioned
Summary:
El Salvador has successfully mined 474 Bitcoins using geothermal energy from the Tecapa volcano, emphasizing sustainable practices in crypto mining. Despite facing significant criticism for its adoption of Bitcoin, the government remains committed to its use as legal tender, maintaining holdings estimated at $354 million. Simultaneously, Tesla CEO Elon Musk's decisions around Bitcoin's environmental impacts continue to draw attention, despite evidence suggesting an increasing reliance on renewable sources in its mining.
Since 2021, El Salvador has successfully extracted 474 Bitcoins, amounting to $29 million, by harnessing geothermal energy from the Tecapa volcano. The feat was achieved using 300 mining machines. Out of the 102 megawatts (MW) energy produced by the state-owned power plant, 1.5 megawatts (MW) was designated for mining the digital currency, according to Reuters. In response to concerns about Bitcoin mining's heavy reliance on electricity and fossil fuels, El Salvador has positioned itself as a leader in sustainable mining practices.
Back in 2021, the country set a precedent by becoming the first to accept Bitcoin as an officially recognized legal currency, alongside the U.S. dollar. Thereafter, the government has implemented numerous Bitcoin-focused strategies, including the establishment of a geothermal plant specifically for mining Bitcoins. El Salvador's current Bitcoin holdings, inclusive of the 474 mined Bitcoins, sum up to 5,750 Bitcoins, with an estimated value of $354 million.
Nevertheless, El Salvador's Bitcoin adoption since 2021 has garnered substantial criticism from several global entities, including the World Bank. The scrutiny intensified amid 2022-2023's bear market, with President Nayib Bukele's decisions receiving widespread questioning. Undeterred, Bukele reaffirmed his commitment to Bitcoin by announcing that El Salvador would acquire one Bitcoin daily. Bukele was previously elected president largely due to his commitment to legalize Bitcoin and efforts towards crime elimination.
Bitcoin mining's reliance on fossil fuels has been the center of debate within the crypto sector for a while. Several organizations, including the Ripple-supported Greenpeace, have proposed a shift of Bitcoin mining consensus from proof of work to proof of stake. Meanwhile, several states in the U.S. banned BTC mining outright.
Tesla CEO Elon Musk had announced the acceptance of Bitcoin as a payment option for Tesla vehicles after purchasing $1.5 billion worth of Bitcoin. However, concerned about the environmental impact of Bitcoin mining, he withdrew this arrangement within a few days. He added that he would reconsider the decision if at least 50% of Bitcoin mining utilized renewable energy. Since then, several studies suggested that over 60% of Bitcoin mining is indeed based on renewable energy, but Musk has not acknowledged these findings or reinstated Bitcoin as a payment option. Despite his environmental advocacy, his firm Tesla is currently facing lawsuits for repeated violations of the Clean Air Act, accused of discharging harmful pollutants into neighboring communities from its Fremont plant.
Published At
5/15/2024 11:16:49 AM
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