We are starting to see a great deal of innovation surrounding cryptocurrency. Actually, this pertains to much of the technological landscape. It is stunning how rapidly things are advancing.
When it comes to cryptocurrency, El Salvador was one of the earlier countries to dive in. This was led by its President Nayib Bukele. He was one of the first to have a nation buy Bitcoin as part of its strategic reserve.
The country was slammed by many including the IMF. That institution, coupled with the World Bank, put a great deal of pressure on El Salvador regarding it decision. In spite of this, Bukele held strong.
Ironic, that we have other major countries discussing something similar. President-elect Donald Trump was very vocal about this on the campaign trail There is a bill in Congress that opens the door to this.
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Volcano Mining in El Salvador
Cryptocurrency operates in the digital world. This is native to the Internet. For this reason, many of the properties associated with this realm is applicable.
Much discussion is emerging surrounding AI and the thirst for energy. It is interesting to think back of how this was the attack on crypto just a few years ago.
It is also worthwhile to mention how some of the innovation regarding energy development put forth by the crypto mining industry is now being implemented to power data centers.
Volcano mining was something Bukele mentioned a few years back. He even went so far as to offer "Volcano Bonds". This is financial, along with energy, innovation in action.
Rent-A-Volcano
How about Volcano-as-a-Service?
This is an idea the President might be exploring. It is something that could catapult El Salvador to the forefront with regards to the "exporting" of geothermal power.
Naturally, the energy isn't exported in the traditional sense. It would, instead, power mining gear, producing coins that are ultimately utilized (or held) around the world.
It is attracting capital from outside the country.
Even with these warnings, some foreign companies have entered the country to take advantage of its more than 170 volcanoes. In June 2023 stablecoin behemoth Tether announced its participation in a $1 billion investment in “Volcano Energy,” a company building a 241 MW renewable energy generation park in Metapan.
If successful, this could be a major windfall for the country. Of course, it is still a controversial topics as there are detractors to the President's plan.
That said, the operation is proving to be successful.
According to official data, shared by the National Bitcoin Office, the country had mined nearly 474 BTC using geothermal energy until May. The Salvadoran mining activities started in 2021 using 1.5 MW of power generated by the Tecapa volcanic complex.
At the present pricing, this is approximately $47 million in BTC that was mined. That is a healthy sum, especially for a nation like El Salvador.
It is a process that is also applicable to data centers.
Technological Innovation
New technologies come with a host of problems. Nothing operates in a vacuum.
As more success is attained, other issues emerge. Within the digital world, we are seeing the need for energy jumping to the top of the list. Companies around the world are seeking to address this situation.
One important component is the need for financing. This is something that President Bukele saw early on. His idea of Volcano bonds are a medium to finance some of the initial operations while moving the risk away from the government.
As investors pile in, a pathway to expansion occurs. We can see how the proof-of-concept is already working, with $47 billion mined. The viability of this endeavor, at least from a profit standpoint, exists.
Of course, we are discussing one idea, in a single part of the world. There is a lot of technological innovation occurring with chips, software, manufacturing, and energy. Hundreds of billions of dollars are being invested looking to solve these problems.
The next generation Internet is dependent upon this. Web 3.0 is going to require a lot of power. Not only are we dealing with computers, including mining rigs, but also robots. These can come in the form of autonomous vehicles as well as humanoids.
It is also a way for countries to change their fortunes. El Salvador had a GDP of $34 billion in 2023. This means that billions in output of geothermal energy could significantly affect the growth rate of the country.
Technology can do this.