El Salvador has officially launched its first local Bitcoin mining pool, as the Volcano Energy initiative begins mining blocks via Lava Pool and Luxor Technology in partnership.
The Bitcoin-friendly nation’s $1 billion renewable energy project made headlines earlier in 2023, with stablecoin issuer Tether among the companies investing in the project, which aims to generate electricity from renewable sources in El Salvador to power future Bitcoin mining operations.
Volcano Energy utilizes Luxor’s expertise in Bitcoin mining software and services. Additionally, the project will use Luxor’s Hashrate Forward Marketplace to mitigate market volatility via automated risk management strategies employed by other large Bitcoin mining operators.
Gerson Martinez, chief strategy officer at Volcano Energy, issued a statement highlighting El Salvador’s ongoing efforts to secure first-mover advantage as a Bitcoin-adopting nation:
“Our vision is to create a vertically integrated energy and bitcoin mining company whose value is accretive to investors and to all Salvadoran citizens.”
Ethan Vera, the chief operating officer of Luxor, stated that the establishment of Volcano Energy and the commencement of local Bitcoin mining will contribute to Bitcoin’s decentralized geographical ethos.
The announcement also mentions the possibility that countries with abundant renewable energy sources could use Bitcoin mining to increase the profitability of new energy initiatives. Mining operations can provide energy producers with a “flexible buyer of first and last resort” and function as an alternative revenue stream.
As a public-private partnership, Volcano Energy will donate 23 percent of its net income from mining operations to the government of El Salvador. Mining profits will also be invested in energy transmission and infrastructure to stimulate economic and technological development in the Central American nation.
The first phase of the Volcano Energy project entails the development of a 241-megawatt (MW) renewable energy park in Metapán, comprised of 169 MWs of photovoltaic solar energy and 72 MWs of wind power. The project’s long-term objective is to utilize the country’s copious geothermal energy.
In a previous exclusive interview with Cointelegraph at the Money20/20 conference in Amsterdam, Paolo Ardoino, the chief technology officer of Tether, stated that the company’s investment was intended to diversify its interests into energy production while utilizing renewable energy to mine Bitcoin.
