This article is from es.cointelegraph.com and the original article can he read here
Bitcoin mining is expanding more and more around the world, but in Latin America its activity seems to have increased in recent months. This increase in use cases is due to various socio-economic factors as various Latin American economies have seen their currencies devalued in recent years and in particular since the start of the pandemic. For this reason, there are more and more people who see in crypto assets an opportunity to avoid the devaluation of their assets.
On this occasion the town of Panajachel, located in Guatemala would have joined. On March 25, the Mayor’s Office of the city – known in colloquial language as “Corduroy” – decided to give the green light to a project to boost bitcoin mining in the municipality. In the same way as in El Salvador plans to harness geothermal energy from volcanoes to mine bitcoin. If we take into account that the energy demand of mining is high, using available energy sources is a great advantage to reduce costs and direct the activity in a more profitable way. Therefore, in Central America there are already initiatives underway to mine with volcanic energy.
Mining Bitcoin with volcanic energy
The local Bitcoin Lake project sought to try to replicate what Bitcoin Beach achieved in El Salvador. Bitcoin Lake founder Patrick Melder told Bloomberg that bitcoin mining activities had already begun in the town. In addition, there are already more than a dozen businesses that accept payment with BTC. These developments greatly help the adoption of cryptocurrencies in the population as they greatly facilitate the access and use of these assets.
Panajachel would thus become one of the first municipalities with bitcoin mining in Central America. The peculiarity of this place is that has volcanic energy, like El Salvador. In this case, it has volcanoes of San Pedro, Tolimán and Atitlán. Melder explained that this energy is a free resource that can be used locally and that it gives Central American bitcoin miners a competitive advantage over those who do have to pay for electricity and, therefore, have additional fixed costs to keep your business running.
Besides, these initiatives have government support so it is possible that they have subsidies for the activity until it begins to cover the initial investment in bitcoin production. Although geothermal plants require a significant initial investment, it is estimated that the production of bitcoin could make these projects profitable in a matter of months. Although it depends on factors that cannot be foreseen, the bullish nature of the cryptocurrency makes forecasts optimistic and, in any case, the low-cost source of electricity taking advantage of the geographical conditions of these communities has many practical applications.
Towards a greener industry
Regarding volcanic energy, Melder stressed that “it is a free resource that can be used to mine bitcoin without harming the environment. In fact, my goal is for bitcoin mining to help provide an economic incentive to clean up the lake for the benefit of the people around him”. Another positive aspect of the project lies in the repercussions for the community, creating jobs, providing capital inflow and improving the conditions of the natural environment of the region.
The importance of mining initiatives for bitcoin and other cryptocurrencies goes beyond the income of capital since the benefits for small communities are enormous. On the one hand, there is the educational factor in blockchain technologies and the use of crypto assets. On the other hand, these projects incentivize businesses to accept crypto assets and thus offer citizens a way to preserve value outside of local currencies that are susceptible to inflation and devaluation. Will these new nodes be able to be competitive in the bitcoin network in the coming years?
At the moment there are other similar projects in the region, after the case of El Zonte, which was the basis for Bitcoin later being accepted as legal tender in El Salvador. Large projects are expected to be announced in other countries such as Paraguay or Argentina and, after the difficulties that the miners in Kazakhstan are encountering, the focus has been placed on Venezuela, since this country maintains one of the lowest rates in electricity consumption. These competitive advantages can put Central American miners on the map and help further decentralize the bitcoin network around the world with more nodes and more hashrate to process the transactions of the growing community of crypto users.