Living on a volcano: The outlook of El Salvador’s crypto mining industry
El Salvador, the first nation to adopt Bitcoin (BTC) as legal tender, has recently announced the relaunch of its wallet app Chivo, which is supposed to patch the previous version’s stability and scalability issues. The update is welcomed news for the Central American country’s crypto experiment, which faced some hurdles and harsh criticism over the last few months. While much of the observers’ attention has been focused on aspects such as retail adoption of crypto and geopolitical implications of Bitcoin’s legal status in El Salvador, the progress of the nation’s mining industry toward achieving President Bukele’s moonshot vision has been less discussed lately. Here’s what the current prospects of El Salvador’s mining industry look like.
In October 2021, when El Salvador had already become the world’s first country to adopt Bitcoin, one of its main energy sector officials shared his optimistic view on the prospects of crypto mining in the country.
President of the state-run Lempa River Hydroelectric Executive Commission Daniel Alvarez told journalists about the “endless possibilities” to produce energy via hydroelectric, solar, wind and tidal power plants with “willpower” being the only component needed to succeed. “We don’t spend resources that contaminate the environment, we don’t depend on oil, we don’t depend on natural gas, on any resource that isn’t renewable,” he also remarked.
El Salvador’s current energy capacity, however, is rather modest. Reportedly, it has only two geothermal power plants — one at the base of the Tecapa volcano and one in Ahuachapan — that already contribute to Bitcoin mining. Together, they generate slightly under 200 megawatts of electric power and only one of them allocates 1.5 megawatts —
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