El Salvador officially launched its first local Bitcoin (BTC) mining pool as the Volcano Energy project begins mining blocks through Lava Pool in partnership with Luxor Technology.
The Bitcoin-friendly country’s $1 billion renewable energy project made headlines earlier in 2023, with stablecoin issuer Tether among companies investing in the project that plans to generate electricity from renewable sources in El Salvador to power future Bitcoin mining operations in the country.
Volcano Energy is tapping into Luxor’s experience in providing Bitcoin mining software and services. The project will also use Luxor’s Hashrate Forward Marketplace to mitigate market volatility through automated risk management strategies used by other major Bitcoin mining operators.
Bitcoin has the potential to pay off its climate debt much sooner than solar energy, and, thanks to its ability to mitigate methane, it can address more urgent challenges. #Bitcoin #ClimateAction
— Volcano Energy (@Volcano_Energy) October 3, 2023
A statement from Volcano Energy chief strategy officer Gerson Martinez highlighted ongoing efforts by El Salvador to secure first-mover advantage as a Bitcoin-adopting nationstate:
“Our vision is to create a vertically integrated energy and bitcoin mining company whose value is accretive to investors and to all Salvadoran citizens.”
Luxor’s chief operating officer Ethan Vera said the establishment of Volcano Energy and the start of local Bitcoin mining will contribute to Bitcoin’s ethos of geographical decentralization.
The announcement also mentions the potential for countries with abundant renewable energy sources to use Bitcoin mining to improve the economics of new energy projects. Mining operations can provide a “flexible buyer of first and last resort” for energy producers and act as an alternative revenue stream.
As a public-private partnership, Volcano Energy is set to contribute 23% of its net income from mining operations to the El Salvador government. Mining profits are also set to be reinvested into energy transmission and infrastructure to stimulate economic and technological growth in the Central American nation.
Related: Bitcoin-friendly El Salvador sees bond returns soar to 70% in 2023
The first phase of the Volcano Energy project involves the construction of a 241-megawatt (MW) renewable energy park in Metapán that will comprise 169 MWs of photovoltaic solar energy and 72 MWs of wind power. The long-term goal of the project is to tap into abundant geothermal energy in the country.
In a previous exclusive interview with Cointelegraph at the Money20/20 conference in Amsterdam, Tether’s chief technology officer Paolo Ardoino said that the company’s investment was aimed at diversifying its interests into energy production while making use of renewable energy to mine Bitcoin.
Cointelegraph journalist Joe Hall traveled to El Salvador in 2023, documenting the adoption of Bitcoin as a means of payment in the two years since the country became the first in the world to officially make BTC legal tender.
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