Crypto Adoption in El Salvador Skyrockets with Launch of Volcano Energy Mining Pool

Crypto Adoption in El Salvador

El Salvador has taken a major step towards becoming a Bitcoin-friendly nation state, with the launch of its first local Bitcoin (BTC) mining pool. The Volcano Energy project is mining blocks through the Lava Pool in partnership with Luxor Technology. This $1 billion renewable energy project has attracted investment from companies such as stablecoin issuer Tether.

Volcano Energy is making use of Luxor’s expertise in providing Bitcoin mining software and services. The project is also leveraging Luxor’s Hashrate Forward Marketplace to reduce market volatility, using strategies employed by other major Bitcoin mining operators.

Gerson Martinez, Chief Strategy Officer of Volcano Energy, commented on El Salvador’s efforts to secure a first-mover advantage as a crypto-adopting nation:

Crypto Adoption in El Salvador

Luxor’s chief operating officer Ethan Vera said the establishment of Volcano Energy and the start of local Bitcoin mining will contribute to Bitcoin’s ethos of geographical decentralization.

The announcement also mentions the potential for countries with abundant renewable energy sources to use Bitcoin mining to improve the economics of new energy projects. Mining operations can provide a “flexible buyer of first and last resort” for energy producers and act as an alternative revenue stream.

As a public-private partnership, Volcano Energy is set to contribute 23% of its net income from mining operations to the El Salvador government. Mining profits are also set to be reinvested into energy transmission and infrastructure to stimulate economic and technological growth in the Central American nation.

The first phase of the Volcano Energy project involves the construction of a 241-megawatt (MW) renewable energy park in Metapán that will comprise 169 MWs of photovoltaic solar energy and 72 MWs of wind power. The long-term goal of the project is to tap into abundant geothermal energy in the country to further increase crypto adoption.

In an earlier exclusive interview with Cointelegraph at the Money20/20 conference in Amsterdam, Tether’s Chief Technology Officer Paolo Ardoino revealed that the company’s investment was geared towards diversifying its interests into energy production while taking advantage of renewable energy to mine Bitcoin.

Joe Hall, a Cointelegraph journalist, traveled to El Salvador in 2023 to document the crypto adoption in the two years since the country became the first in the world to make Bitcoin a legal tender.

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