2 min read.Updated: 10 Jun 2021, 07:17 AM ISTLivemint
El Salvador, in a historic move on Wednesday, became the first country in the world to officially adopt bitcoin as the legal tender. The nation’s Congress approved Bukele's proposal to embrace the cryptocurrency with 62 out of 84 possible votes
NEW DELHI: Hours after passing a resolution that made it the first country in the world to recognize bitcoin as a legal tender, Latin American nation El Salvador has said that it will mine the cryptocurrency using geothermal energy from its volcanoes.
In a tweet, President Nayib Bukele, said: “I’ve just instructed the president of @LaGeoSV (our state-owned geothermal electric company), to put up a plan to offer facilities for bitcoin mining with very cheap, 100% clean, 100% renewable, 0 emissions energy from our volcanos."
El Salvador, in a historic move on Wednesday, became the first country in the world to officially adopt bitcoin as the legal tender. The nation’s Congress approved Bukele's proposal to embrace the cryptocurrency with 62 out of 84 possible votes.
El Salvador was among the few countries in the world, which didn’t have its own fiat currency and used the US dollar, which will still remain a legal tender in the country.
In another tweet on Thursday, Bukele said that the country’s engineers have dug a new well that will provide around 95 MW of 100% clean and zero emissions geothermal energy from the volcano. “Starting to design a full bitcoin mining hub around it," Bukele tweeted along with a video, showing water vapours gushing out of a well.
El Salvador’s move to mine bitcoin using green energy has come amid the cryptocurrency’s criticism over it environmental impact. According to the Cambridge Bitcoin Electricity Consumption Index, the world’s biggest digital asset uses more energy than countries such as Sweden and Malaysia.
Amid the concerns over the rapidly increasing use of fossil fuels for bitcoin mining, Tesla chief Elon Musk had halted purchases of vehicles with bitcoin last month.
The high energy-intensive nature of bitcoin is due to the protocol it uses in the mining process. Major cryptocurrencies such as bitcoin and ethereum use proof of work (PoW) to verify transactions on the blockchain. This process uses an advanced form of mathematics, which only powerful computers can solve, resulting in significant usage of electricity.
The rebuke by Musk along with China shutting down bitcoin mining operations due to concerns over energy consumption has hit sentiment in the crypto market.
For the last three-month period, bitcoin is lagging in terms of returns from the S&P 500 and gold. Moreover, the digital asset has slumped around 44% from its all-time high of $64,804.72, which was hit on 14 April 2021.
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