The millennial businessman in charge of El Salvador wants to build lava-powered bitcoin farms on the slopes of the country’s volcanoes. It feels like we are now deep into the 21st century.
With “COVID-recovery funding” from the World Bank, Salvadorian president Nayib Bukele has opened tenders for geothermal plants at the Chinontepec (10MW) and Chinameca (25MW) volcanoes. With a bitcoin costing roughly 1,500KW/h to produce at USD $70,000 a coin, the sums on mining at these low-cost energy sites seem to stack up.
On the other hand, it’s not clear how miners in the Central American country would handle the tropical heat, when bitcoin computing already produces so much of it. Nor would El Salvador’s transport infrastructure be looked on favourably by companies interested in setting up shop, compared to major bitcoin mining areas like Texas.
For now, President Bukele is acquiring the country’s bitcoin by trading it. And he’s tweeting like a crypto-trader too.
Proceeds of Bukele’s profits are supposedly going to schools and a veterinary hospital. “We’re literally saving puppies here,” the president tweeted. “Buy bitcoins and save the puppies.”
Bitcoin in El Salvador
In September this year, Bukele declared bitcoin an official currency of El Salvador. The country’s currency, the colón, had already been formally abandoned for the US dollar in 2001.
The Bitcoin Law says, “All economic actors must accept bitcoin as payment when offered for a good or service.”
Derided as a stunt, Bukele says using bitcoin will stop Salvadoreans losing a percentage in bank fees when money is sent home by migrant workers in Europe and the US. He also says the government’s official bitcoin wallet app is a good alternative in a country where 70% of people don’t have a bank account.
The government is giving away a free USD $30 in bitcoin to citizens who download the app, called Chivo Wallet. They also set up ATMs that bitcoin holders can use to withdraw US dollars.
Bukele is an idiosyncratic figure. He has labelled both left- and right-wing governments in the region as dictatorships.
After being criticised by US officials for being a dictator himself, he changed his Twitter bio to, “Dictator of El Salvador.” It has since been changed again, to “Emperor.”
It would be funny if it weren’t close to the truth. State officials were implicated in the murder of leftist opposition politicians, and Bukele has stormed into parliament with military leaders to make demands of legislators.
Unfortunately, El Salvador’s president is not just an internet troll.
Feature image is a logo of the Bukele family’s marketing firm, 4am Saatchi and Saatchi.
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