El Salvador President Nayib Bukele has hinted at a “rent your volcano” program as a way to harness geothermal energy to power Bitcoin mining.
The announcement came after one X the user shared that El Salvador has so far mined 474 Bitcoins, worth about $46 million, with the help of volcanic geothermal power. Bukele responded to the post, saying, “And with 170 volcanoes … A ‘rent your volcano to mine Bitcoin’ program might actually make sense.”
Data published by Spot chain shows that the Salvadoran government currently holds over 5,900 Bitcoins, which is worth about $581.399 million at the time of writing. As of November 1, this figure was about $410 million.
In 2021, El Salvador became the first country to accept Bitcoin as legal tender. Bitcoin ATMs popped up all over the country and the government announced plans to build a “Bitcoin City”. The city would be built at the base of the Conchagua volcano in the southeastern region of La Unión, which Bukele said would include “Residential areas, commercial areas, services, museums, entertainment, bars, restaurants, airport, port, railway. – all for Bitcoin.” However, the project has faced several delays.
Bitcoin has also faced limited popularity in the country, where 26.6% of the population lived below the national poverty line in 2022. In 2023, a study by the Central American University of El Salvador found that 71.1% of Salvadorans thought Bitcoin did not had done “nothing” to improve the financial situation of families, while a survey published in October 2024 by Francisco Gavidia University based in San Salvador found that 92% of Salvadorans do not transact with Bitcoin.
While some see geothermal energy as a viable option for Bitcoin mining, others are more skeptical.
Álvaro Trigueros, director of the Department of Economic Studies of the Salvadoran Foundation for Economic and Social Development (FUSADES), told German wave in 2021: “According to the installed power capacity in El Salvador, the national electricity production is in deficit. 19.9 percent of the consumed energy must be imported”. He added: “Since the country is not self-sufficient, if Bitcoin were to be mined in El Salvador, it would cause an excessive increase in demand for electricity and the country would be forced to import more.”
In the same year, Ricardo Navarro, head of the environmental NGO Salvadoran Center for Appropriate Technology (MANNER) said POLICY: “I get the impression that Bukele doesn’t really understand what’s going on in the energy situation,” explaining that it’s unlikely that Bitcoin miners will be able to meet their electricity needs by relying on volcanoes alone. He added that Bitcoin geothermal mining would “definitely” complicate demand.
However, Erick Chacon, the president of the Salvadoran Financial Technology Association (ASAFINTECH) said Latin American Reports that the prospect of a “rent your own volcano” scheme “demonstrates a creative and disruptive vision that has characterized El Salvador as a global leader in the adoption of emerging technologies.” Chacon explained that, while such ideas “may initially seem unusual”, they “generate conversations, attract international attention and position the country as an attractive space for technological investment”.
Chacon added that, before this idea can be realized, “technical, economic and environmental feasibility studies must be carried out” in order to ensure that the country’s resources are used “efficiently, sustainably and in accordance with national regulations and international”.
ASAFINTECH, according to Chacon, is “convinced that constructive debate and analysis are essential for El Salvador to continue to lead the region in financial technology and Bitcoin adoption.”
Alastair Caithness, a Bitcoin mining consultant and host of Boom! It’s on the Blockchain podcast, it is explained Latin American Reports that using El Salvador’s geothermal energy to mine Bitcoin offers “both advantages and disadvantages.” Caithness stated that “geothermal energy is considered sustainable, reliable and environmentally friendly, producing minimal greenhouse gas emissions”, adding: “Unlike wind or solar, geothermal energy is available around the clock, unaffected by weather and climate change”.
However, Caithness noted, “The use of geothermal energy to mine Bitcoin is geographically limited to regions with accessible geothermal heat, such as volcanic areas or tectonic plate boundaries,” which “limits its widespread use.” . Additionally, he said, transporting geothermal energy to remote mining sites can be costly, “limiting large-scale adoption in areas without geothermal resources.”
Despite these challenges, Caithness believes that “the growing demand for energy in crypto mining, data centers and AI presents a significant opportunity for El Salvador’s geothermal energy,” positioning the country “as a key player in the future of Bitcoin mining and the broader crypto energy landscape.”
Farbod Esmaeilion, a senior researcher at KN Toosi University of Technology in Iran and co-author of a feasibility study on Bitcoin production with geothermal energy, said Latin American Reports that geothermal energy is the “most sustainable” way to mine Bitcoin.
However, he noted that there must be “environmental considerations” before such schemes are undertaken. Among these considerations, according to Esmaeilion, is the possibility of water contamination, which can occur during the construction of geothermal wells. He said there is a risk of “materials and debris” entering nearby water sources, including drinking water, which governments must manage before large-scale geothermal Bitcoin mining projects begin.
Another challenge presented by Bitcoin geothermal mining is that of identifying locations where geothermal plants can be built. Esmaeilion explained that governments need to find the “best and most optimal locations” for these enterprises, making sure that every possible location is at the temperature needed for Bitcoin mining. He added: “Half of this story is underground.”
Esmaeilion also said governments should take “economic considerations” into account, given that “a large amount of investment” is needed before projects such as Bukele’s rent-your-volcano scheme become viable, especially given that geothermal energy is “much more expensive”. than wind or solar alternatives.
Although Bukele has repeatedly emphasized his commitment to cryptocurrency, it remains to be seen exactly how much more money his government is willing and able to invest in geothermal Bitcoin mining. However, that could change if the value of the country’s crypto investments continues to rise as it has over the past few months.
On December 5, the price of one Bitcoin reached $100,000 for the first time in history. When Bukele then posted a screenshot of El Salvador’s Bitcoin wallet, he got a one-word response from Elon Musk: “Impressive.”
