At Bitcoin Miami there were cheers when El Salvador announced it was making bitcoin legal tender. It was welcome news after Elon Musk’s tweets about bitcoin mining’s excessive energy use, and El Salvador’s president announcing that they planned to use geothermal energy from the country’s volcanoes to power crypto mining enhanced it.
The bitcoin community is not only celebrating a new Central American haven for the leading cryptocurrency, it is also pointing to El Salvador as being a proving ground for ‘green’ bitcoin. Geothermal plants draw their energy from an existing, naturally occurring heat, in this case it is El Salvador’s volcanoes, meaning they have a minimal carbon footprint.
Michael J. Casey believes there is an even greater opportunity. He said, “I think El Salvador (population 6.4 million), one of the poorest countries in the Western Hemisphere, has an opportunity to make a far more groundbreaking energy play than the buzz generated by linking a volcano to a bitcoin mine.”
What he suggests is that Nayib Bukele’s government should work with miners, local community leaders and foreign investors to strategically fund the expansion of the country’s electricity coverage, specifically via a decentralized network of cheap, clean, cyber-secure, and community-empowering solar or wind-power microgrids.
As Casey says, there is a narrative about bitcoin destroying the planet that needs to be addressed. Miners prefer low-cost green sources of power and for that reason they can be a considerable force in leading the way to a green energy infrastructure, and not just in El Salvador. Casey adds, “If executed properly, El Salvador’s bitcoin project could achieve a host of the United Nations’ Sustainable Development Goals (SDGs).”
Across the world, bitcoin miners are already tapping into existing renewable or stranded energy sources, such as wasted natural gas destined for flaring and underwriting the development of green electricity infrastructures to serve wider communities.
Furthermore, Harry Sudock, vice president of strategy at mining infrastructure provider GRIID, told Casey his company is seeing relentless demand from wind, hydro and solar developers for bitcoin mining and that co-locating facilities offers revenue guarantees that allow communities to expand renewables to serve local people. Casey says, “In other words, bitcoin mining can serve as that missing piece of risk capital needed to kick-start infrastructure projects, not only to shift the world toward renewable energy but also to foster economic development.”
He suggests finding funding for “community-based green power projects run as regional microgrids.”
Most importantly, he adds, “if bitcoin miners source their power from local, community-based grids, their payments for it – transferred in newly legal tender bitcoin – will go to those communities, providing a steady long-term source of income.”
We must acknowledge that at the moment bitcoin miners do use large amounts of fossil fuel energy, but the moment to change that is right now.