Imagine renting a volcano. Not for tourism, not for research, but for mining Bitcoin. This isn’t a plot from a dystopian sci-fi movie but a real idea brewing in El Salvador. The small Central American country, already famous for its bold embrace of Bitcoin, has mined 474 Bitcoins (roughly $46 million) using geothermal energy and plans to invite miners worldwide to replicate the feat.
From Lava to Blockchain
El Salvador boasts over 170 volcanoes. Most are dormant, but their geothermal potential is far from idle. President Nayib Bukele, no stranger to provocative tweets, called the idea of using volcanic energy for mining "logical." And it seems the numbers agree: the pilot project proved successful, generating clean energy to mine hundreds of Bitcoins.
But this is only the beginning. The country's leadership envisions creating tax-free zones near geothermal sites, where crypto enthusiasts can mine coins sustainably. One such zone could be La Unión, a dormant seaport that may soon become “Bitcoin City” — a hub for crypto mining powered entirely by volcanic heat.
The Birth of “Bitcoin City”
El Salvador has a knack for being the first in uncharted waters. Three years ago, it became the first country to make Bitcoin legal tender. Now, it's pitching “Bitcoin City” as a futuristic haven where Bitcoin is mined sustainably and investors are incentivized by tax breaks.
The city will rely entirely on renewable energy, promising a greener path for an industry often criticized for its environmental impact. Infrastructure development is set to be fueled by major investments, with Turkey's Yilport Holding committing $1.6 billion for upgrades to both La Unión and Acajutla, El Salvador’s primary port.
Volcano Bonds and the Treasury's Bitcoin Chest
To fund this ambitious project, El Salvador issued “Volcano Bonds.” These Bitcoin-backed financial instruments are designed to attract investment into geothermal mining infrastructure. So far, the country holds over 5,944 Bitcoins, valued at more than $583 million. With the recent Bitcoin rally, these holdings have given the treasury some breathing room.
But the boldest part of the plan? Leasing volcanoes to miners. This could create a new revenue stream for El Salvador while giving miners access to renewable energy at a competitive cost.
The Challenges Ahead
Before Bitcoin miners can pack their rigs and head to El Salvador, some hurdles need to be cleared. The country's laws don't yet accommodate this novel concept. Legislative updates are in progress to create a framework for leasing volcanoes and regulating geothermal-powered mining.
The move comes at a time when Bitcoin mining is seeing renewed interest. As the market rebounds, more miners are seeking efficient, sustainable ways to keep operations profitable. El Salvador might just be onto something here.
Why It Matters
El Salvador’s experiment goes beyond national borders. If successful, it could inspire other countries with geothermal resources to reconsider their potential. It also challenges the narrative that Bitcoin mining is inherently harmful to the environment.
Sure, it’s bold. And yes, it’s a gamble. But if there’s one thing El Salvador has proven, it’s that they’re not afraid to bet on Bitcoin — even if the stakes involve entire volcanoes.