El Salvador’s First Bitcoin Mining Pool Powered by Geothermal Energy
El Salvador, known for its progressive approach to cryptocurrencies, has marked another significant milestone by launching its inaugural Bitcoin mining pool, named “Lava Pool.” This pioneering initiative is a joint venture between Volcano Energy, a renewable energy-focused Bitcoin mining firm, and Luxor Technology, a prominent Bitcoin mining software provider.
Mining with Renewable Energy
Lava Pool distinguishes itself by harnessing El Salvador’s abundant geothermal energy to mine Bitcoin. Volcano Energy, at the helm of this project, is committed to mining Bitcoin exclusively through the pool. What makes this endeavor even more noteworthy is that Volcano Energy has pledged to contribute 23% of its net mining income to the Salvadoran government, as part of a public-private partnership.
The ambitious project is spearheaded by Josue Lopez, a 23-year-old Bitcoin advocate and CEO of Volcano Energy, and Max Keiser, Chairman and advisor to El Salvador President Nayib Bukele. El Salvador garnered international attention in 2021 by becoming the first country to grant legal tender status to Bitcoin. The nation kickstarted its Bitcoin mining journey the same year, utilizing the power of its volcanoes for geothermal energy, and subsequently announced plans to issue “Bitcoin bonds” in 2022.
Lava Pool and Bitcoin Mining Pools
Bitcoin mining pools, such as Lava Pool, enable miners to combine their computing power, thereby increasing their chances of earning Bitcoin rewards. Lava Pool adopts a Full Pay Per Share payment model, which means miners receive compensation based on their hash power contribution to the pool. Additionally, Lava Pool aims to offer an affordable mining pool option for small-scale miners, emphasizing inclusivity within the Bitcoin mining ecosystem.
Mitigating Bitcoin Price Volatility
To address Bitcoin’s inherent price volatility, Luxor Technology provides advanced hedging strategies to Lava Pool participants. Luxor, known for operating one of the top ten Bitcoin mining pools globally, views this partnership as an opportunity to contribute to Bitcoin’s geographical decentralization.
Ethan Vera, Luxor’s COO, noted, “The ethos of Bitcoin mining revolves around geographical decentralization, and the development of mining pool infrastructure in El Salvador will contribute to this goal.” Luxor receives a nominal fee from Lava Pool for its management services, while the pool benefits from reduced mining fees.
Boosting Renewable Energy and Economic Growth
This venture is part of El Salvador’s broader strategy to integrate Bitcoin into its energy infrastructure. By tapping into renewable energy resources, the country aims to create a dependable buyer of excess energy, particularly in remote regions. This approach offers a flexible means to generate revenue for new energy projects while supporting economic growth.
The Salvadoran government intends to reinvest mining profits generated through this partnership into the nation’s energy infrastructure, further fostering its commitment to Bitcoin and renewable energy. Volcano Energy, which secured $1 billion in investment commitments, is well on its way to becoming a pioneering vertically integrated energy and Bitcoin mining company, serving both investors and the citizens of El Salvador.