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A few weeks ago, El Salvador became the first country in the world to declare Bitcoin a form of legal tender, spend $ 225 million and increase its government stock to 550 Bitcoins as part of a deployment designed to cement the country as a global leader in cryptocurrency. President and right-wing populist Nayib Bukele tweeted on Friday that the Bitcoin mining operation managed by the public energy company LaGeo SA de CV generated a total of plum of $ 269 in Bitcoin thanks to geothermal energy from volcanoes.
Bukele tweeted early Friday morning that the government was still “testing and installing”, but what he called “#volcanode” was officially working. This follows a video the president tweeted earlier this week about government-branded shipping containers carrying ASIC miners to a jungle energy facility for installation by technicians from LaGeo.
As CNBC noted, the use of geothermal energy to power the creation of cryptocurrency is not new, but the announcement comes as international attention has turned to the massive amounts of electricity that Bitcoin and other cryptocurrencies absorb to fuel their blockchains. (Bitcoin alone is estimated to consume 91 terawatt hours of electricity per year, according to the New York Times, which is just under half a percent of total world production.) About one quarter of the energy of El Salvador is already generated by geothermal power plants, and Bukele’s initiative is designed to capitalize on the cryptocurrency boom while maintaining an eco-friendly image.
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The Salvadoran government has created its own Bitcoin wallet called Chivo which is available to all citizens with a national ID card to register, from which they will receive $ 30 worth of Bitcoin. That’s a lot, given that the gross national income per capita in El Salvador was estimated to be around $ 3,600 in 2020.
A sign of the times, we suppose. However, many El Salvadorians are extremely skeptical that jumping on the Bitcoin bandwagon is in fact a wise move, as it ties the country’s economy to the extremely fluctuating prices of the cryptocurrency and could make it vulnerable to speculation. in world markets. CNBC previously reported that a poll from a Central American university showed that 70% of those polled in the country were not in favor of Bitcoin being legal tender, with many having little confidence in Bitcoin itself. even or claiming to have a limited understanding of how to actually use it.
According to Associated press, protests erupted in the capital San Salvador on Wednesday, protesting against what they see as the undemocratic concentration of power in the Bukele administration. Many in the crowd were particularly unhappy with his Bitcoin policy, with the AP noting that some protesters wore “NO To Bitcoin” shirts. A handful of participants vandalized some of the 200 cryptocurrency ATMs which were recently set up across El Salvador, although the AP noted that the network was already largely non-functional throughout the week after Chivo was overwhelmed by the number of new registrants and issues with its application created by the government.
“The government is betting over $ 200 million in a virtual casino, and it’s taxpayers’ money,” said Ricardo Castañeda, senior economist at the Central American Institute for Fiscal Studies. the Wall Street newspaper.
Jorge Hasbún, who owns chain clothing stores and heads the El Salvador Chamber of Commerce and Industry, told the newspaper that the three-month deployment under Bukele’s government was rushed and n ‘had not given the companies enough time to prepare to accept the new tender. He also said the government failed to put in place a proper regulatory regime before pushing cryptocurrency legislation out the door.
“If a customer comes to pay in bitcoin, I’m not ready,” Hasbún told the Journal. “We could have been riding the wave in a positive way, but the way the law was imposed was not positive.”
Bitcoin prices, and that of many other cryptocurrencies, jumped on Friday. Shortly after 5:00 p.m. ET, the price of Bitcoin was over $ 48,100, up over $ 4,300 from the previous day.
Other politicians have similar ambitions in the United States. Miami Republican Mayor Francis Suarez Friday told the Washington Post a city-run initiative called MiamiCoin has already grossed the city government $ 7 million since its rollout in August. Suarez suggested that in the future MiamiCoin could turn the city into a sort of tax-free libertarian haven.
“When you think of the possibility of being able to run a government without the citizens having to pay taxes. It’s amazing, ”Suarez told the newspaper.
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