Bitcoin is now legal tender in El Salvador as the country unleashes renewable energy and Bitcoin mining plans
El Salvadorians can now use bitcoin as currency as the country becomes the first worldwide to make the crypto currency legal tender after politicians approved President Nayib Bukele’s proposal to utilise the currency, with the news leading to another increase of 6% overnight.
Political advisors, lawmakers and regulators across the globe have voiced concern that the crypto currency facilities illegal uses and money laundering, warning of instability.
Regulators and policymakers all over the world have warned about Bitcoin’s volatility, and that it facilitates money laundering and other illicit uses.
The news comes after the Bitcoin saw a mammoth rise to just over $65,000 in April this year, an all-time high three times that of the peak recorded during the high of $19,783.21 seen on 18th December 2017. Dec. 18, 2017.
on Tuesday 20th November 2018 Bitcoin’s value plummeted to $4,387, falling 7% from the low recorded during the previous week, with 14th November wiping over $30 billion off it’s value in 24 hours by 7th December 2018 the currency saw a further low of $3,640 with Bitcoin losing more than 70% of its value in 2018.
A volatile currency presents serious issues, with a weak currency making imports more expensive, whilst encouraging exports by making them cheaper for international markets to acquire, with volatility contributing to a nation’s trade deficit or surplus.
A dip as low as the 2018 freefall could mark devastation to an economy hedging its bets on the currency.
El Salvador’s New Ideas Party chief, William Soriano said “Bitcoiners around the world, the time has come. We are ready” whilst the country’s National Unity Deputy, Guillermo Gallegos also applauded the move, saying that “this is an important step. A step for technology, a step into the future to bring us financial inclusion, investment, tourism, innovation, economic development to our country.”
Combining energy intensive Bitcoin mining with renewable energy
With even further ambitious plans banking on the success of the currency, President Bukele has instructed LaGeo, the state owned geothermal energy developer to establish Bitcoin mining facilities around the country’s initiative to stimulate development founded upon the country’s abundant volcanic source of geothermal energy.
Speaking of the plans during last night’s Twitter discussion on the plans, President Bukele said “we want to promote industrial parks where you can set up your factory and you will receive cheap, clean, renewable energy”, citing that Bitcoin miners would find the situation ideal with close proximity to cost efficient electricity generated by the natural resource.
The news comes as an entrepreneur, Josh Riddett from Bury in Lancashire (UK) has invented a mining machine that runs off bioenergy from cow dung.
The plants developed by Mr Riddett run on electricity generated by anaerobic digestion (AD), renewable energy plants that convert animal waste.
Digital Bitcoin mining, like any data intensive business, tends to use significant amounts of electricity, so linking the facilities with renewable energy ticks all the right boxes.