A top crypto miner has revealed that El Salvador’s bitcoin mine could earn over 21,000 BTC ($760 million) every year.
Sufficient Power for an Average Mine
Last month, El Salvador made history as the first country to identify and utilize bitcoin as a legal tender. Hence, legally allowing its citizens to make transactions with bitcoin and even send remittances abroad. However, El Salvador’s president Nayib Bukele wanted to take it further. He revealed that the country wants to empower bitcoin miners with clean energy to mine bitcoin.
This clean energy will be the geothermal energy of active volcanoes which abound in the country. The first goal is to use this geothermal source to produce about 96 megawatts (MW) of energy which is sufficient for an average mine. Right now, that move is highly profitable, according to George Kikvadze, founder of BitFury (a bitcoin mining company).
Kikvadze revealed via Twitter that “96MW will produce three exhashes which is the equivalence of 1800 bitcoins monthly using current bitcoin network rate and at current bitcoin prices, that amount of bitcoin is worth about $760 million.” He further said, “I am convinced that there hasn’t any project as profitable as this in the whole continent or the history of El Salvador.”
George Kikvadze Tweet. Source: Twitter
El Salvador’s Bitcoin Revenues
Bitcoin miners or miners for proof-of-work digital currencies utilize several computer networks that solve several millions of calculations per second to verify blockchain transactions.
The bitcoin blockchain rewards the bitcoin miners with BTC, which these miners sell to make profits after all other expenses, especially payments for energy consumed. As of this year, each bitcoin block offers a reward of 6.25 bitcoins (worth about $217,000). Hence, it is no wonder these miners generate insane amounts of revenue every day; some of the top miners generate millions of dollars per day.
Such rewards would be a huge blessing for nations with vast amounts of resources for bitcoin mining, such as El Salvador. The earnings from the utilization of these natural resources will boost their economy significantly. That means better livelihoods and more tax income for the nation. However, most countries are not thinking in that direction at all.
For example, China, which is home to the largest number of bitcoin miners, has updated its crypto policy, making it illegal for crypto mining operations to take place in any part of the country. Hence, there has been a massive exodus of miners from China to countries with crypto-friendly policies such as Kazakhstan.
The side effect has been the massive decline in the ‘hash rate’ to new all-time lows as miners continue to search for more locations with crypto-friendly policies. It would seem that the citizens are starting to benefit from the government’s decision to adopt bitcoin as a legal tender.
Last week, the government disclosed that each adult citizen (numbering about 4.5 million) would be airdropped $30 bitcoin. Also, they would access a new free wallet called Chivo for their bitcoin transactions. We hope that El Salvador’s bitcoin plan become successful. It will quash the doubts of naysayers and be the model for other countries’ push for the legal adoption of bitcoin.