El Salvador has officially launched its first local Bitcoin (BTC) mining pool as the Volcano Energy Project begins working with Luxor Technology to mine blocks through lava pools.
The Bitcoin-friendly country’s $1 billion renewable energy project made headlines in early 2023, with stablecoin issuer Tether among the companies investing in the project, which plans to use El Salvador’s renewable energy to generate electricity for the country’s future. Bitcoin mining operations provide electricity.
Volcano Energy is leveraging Luxor’s experience in providing Bitcoin mining software and services. The project will also leverage Luxor’s hashrate forwards market to mitigate market volatility through automated risk management strategies used by other major Bitcoin mining operators.
Bitcoin has the potential to pay off climate debt faster than solar energy, and due to its ability to reduce methane emissions, it can solve more pressing challenges. #bitcoin #climateaction
— Volcano Energy (@Volcano_Energy) October 3, 2023
In a statement, Volcano Energy Chief Strategy Officer Gerson Martinez highlighted El Salvador’s ongoing efforts to ensure first-mover advantage as a nation-state adopting Bitcoin:
“Our vision is to create a vertically integrated energy and Bitcoin mining company that adds value to investors and all Salvadoran citizens.”
Luxor chief operating officer Ethan Vera said the establishment of Volcano Energy and the launch of local Bitcoin mining will help promote Bitcoin’s geographically decentralized spirit.
The announcement also mentioned the potential for countries with abundant renewable energy to use Bitcoin mining to improve the economics of new energy projects. Mining operations can provide energy producers with “flexible first and last resort buyers” and serve as an alternative revenue source.
As a public-private partnership, Volcano Energy will contribute 23% of the net income from its mining operations to the Government of El Salvador. Mining profits will also be reinvested in energy transmission and infrastructure to stimulate economic and technological growth in the Central American country.
Related: Bitcoin-Friendly El Salvador Expects Bond Returns to Surge to 70% in 2023
The first phase of the Volcano Energy plan involves the construction of a 241 megawatt (MW) renewable energy park in Metapán, which will include 169 MW of photovoltaic solar and 72 MW of wind energy. The long-term goal of the plan is to exploit the country’s abundant geothermal energy.
In a previous exclusive interview with Cointelegraph at the Money20/20 conference in Amsterdam, Tether Chief Technology Officer Paolo Ardoino said that the company’s investments are aimed at diversifying its interests into energy production while using renewable energy to mine Bitcoin.
Cointelegraph reporter Joe Hall traveled to El Salvador in 2023, Record The country has adopted Bitcoin as a means of payment in the two years since it became the first in the world to officially designate it as legal tender.
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