El Salvador is the first nation to legalize crypto and use Bitcoin as official currency.
On June 5, 2023, Volcano Energy announced plans to build a 241-megawatt bitcoin mine in the Metapan region of El Salvador. The commitment amount declared for the project is $1 Billion.
Tether, the stablecoin issuer, will invest around $1 Billion in the El Salvadorian renewable energy initiative Volcano Energy. The power produced will be used in BTC mining.
The mining station will be provided by 169 MW of solar and 72 MW of wind to produce computing power of over 1.3 exahash per second. The mine would be located on the northwest side of the country.
Volcano will pay 23% of the total revenue for this. The firm added that outside investors will own 27% of the mine, and the remaining 50% will reinvest for energy production and mining capacity expansion.
El Salvador is turning to volcanic energy in a bid to enhance mining capacity. Bitcoin is a Proof-of-Work cryptocurrency which means each new unit of the currency is minted by mining (the process of solving highly complex mathematical problems that can be solved only using powerful computers).
In 2019, El Salvador produced over 60% of the nation’s energy via imported fossil fuels. Now the government has turned toward renewable energy to meet decarbonization goals. Last year, the country partnered with the International Renewable Energy Agency (IRENA), an intergovernmental organization focused on energy.
El Salvador fully accepted Bitcoin as legal tender in 2021 and was the country to do so. As per the laws, state and private entities can regulate the issuance of other digital assets.
Analysts claim that the young president of El Salvador is quite enthusiastic about the modernization of the financial infrastructure.
According to Bloomberg, El Salvador purchased 2546 Bitcoins at a base cost of $67 Million at the press time. At the same time, BTC was trading at $26,481.76 with 24-hours trading of $12 Billion.
Bitcoin, the most valued crypto, slipped 1.45% in weekly trading sessions and was trading below $26k when SEC filed a lawsuit against Coinbase and another leading cryptocurrency exchange.
The 24-hour trading volume of Bitcoin was $12 Billion earlier. Tether recently replaced Bitcoin as the most traded cryptocurrency with a trading volume of $18 billion (press time).
Environmental effects of crypto mining activities in the South American country include the deforestation associated with the construction of new mining facilities, along with a capacity of the electric network to deliver trustable and accessible electricity meeting or extending the level available before the crypto adoption as legal tender.
Disclaimer
The views and opinions stated by the author, or any people named in this article, are for informational ideas only and do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing
Source: https://www.thecoinrepublic.com/2023/06/09/el-salvador-volcano-energy-received-1b-funding-from-tether/