Following the recent decline in the value of Bitcoin (BTC), debates about the long-term sustainability of the digital currency and its energy use have resurfaced.
According to Professor of Applied Economics at Johns Hopkins University Steve Hanke, the planned Bitcoin City in El Salvador is not fit for purpose, and it is only an attempt by the country’s President, Nayib Bukele, to garner attention via a publicity stunt. He made the following statement:
“Nayib Bukele’s proposed Bitcoin City is as prepared as Florida is for snow. The advertised power source for the City is an inactive volcano. This is just more attention-grabbing antics from a narcissistic president who is full of hot air.”
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The President of El Salvador Bukele responded on Twitter to the economist’s criticism of the proposed city and his remark that the volcano is “inactive,” slamming Hanke, an “idiot.” The President stated:
“This guy. Of course it is an inactive volcano you id10t! Most geothermal power is extracted from wells near INACTIVE VOLCANOES! Why would you build a city below an ACTIVE VOLCANO?
El Salvador’s volcano used to mine Bitcoin
El Salvador has made significant progress in the cryptocurrency sector since it became the first country to mine Bitcoin using volcanic energy legally.
In June 2021, Bukele said he had directed state-owned geothermal electric company LaGeo to allow Bitcoin miners to plug into the country’s volcanic energy resources.
Volcanic energy ushers in a new era of clean mining for an asset that has been dogged by bad headlines for years because of its carbon footprint. The influence of bitcoin on the environment, for example, has been mentioned as a cause for its outright prohibition by some skeptics.
Bitcoin mining is well-known for using a significant amount of energy, which is more than the total energy consumption of some nations in certain circumstances.
Notably, this is not the first time doubts were expressed by Steve Hanke. El Salvador’s action, the professor warned, will have repercussions, describing it as economic folly. Hanke ultimately believes that the legalization in El Salvador will result in an economic catastrophe.
