Academic Says Bukele’s Bitcoin Mining Test Is ‘Bad Business’

Source: Twitter / @nayibbukele

A leading Salvadoran engineering scientist has claimed that volcano-powered Bitcoin mining (BTC) could be ruinous to the country’s economy, and says the government has spent $4,672 worth of public funds to mine just $269 in BTC.

According to El Diario de Hoy, Carlos Martínez, professor of electrical engineering at the University of El Salvador (UES), claimed that in four days of mining so far, the state had managed to mine a total of BTC 0.00599179 (Then USD 269). The professor added that if the energy price was USD 0.13 Per kilowatt hour and the government used 100 miners 3.74KW WhatsMiner M31S Mining rigs, the state paid USD 1,168 in costs. “This is definitely a bad deal,” concluded Martínez.

The professor made his calculations based on data released by the government on Friday.

However, President Nayib Bukele added a caveat to the figures, stating that the government is “still testing and installing” its new system.

Bukele stated that “we are still testing and installing, but this is officially the first Bitcoin mining” by Volcano Energy.

Other skeptics continue to express doubts. The same media company reported that energy industry insiders “agree that the current facilities at LaGeo (the state-owned geothermal generation company) do not have the capacity to accommodate a Bitcoin mining center,” and claimed that BTC mining requires more energy than the company can produce at the “volcanode.”

Martínez agreed that the nation “does not have the installed capacity to meet the demand for electricity” and warned that, if enough energy were allocated to a mining center”this would increase electricity tariffs for ordinary Salvadorans.”

The media, which contradicts Bukele’s rule and his BTC adoption policy, noted that the president has not yet specified in detail the cost of the equipment acquired for the mining project.” It has also not been determined exactly how much energy is consumed at the site, how much it costs to build the facilities, or how many government employees are involved in the mining project.

Last week, a prominent NGO, the Foundation for Economic and Social Development (FUSADES), stated that mining Bitcoin in El Salvador would “lead to shortages and an increase in energy prices.”

Álvaro Trigueros, the director of the Fusades Department of Economic Studies, was quoted as saying that mining at the “Volcanode” was likely to be limited and could not hope for a “large scale” because the government was all too aware that intensive mining efforts would “create problems in the national electricity market.”

Anyway, on Reddit, many international posters responded with relative enthusiasm, with one writing that they hoped these were “just growing pains as they boosted mining and gained some size.”

Another wrote that the report is “just clickbait” as it “takes time to build up the hash rate and smooth things out.”

Bukele has since triumphantly announced the success of the state-issued Chivo app, which he wrote now has 3 million users – in a country of nearly 6.5 Million people.

But left-leaning Mainsteam media continued to claim that the government is grossly overstepping the law in its Chivo adoption campaign.

La Prensa Gráfica reported that deputies were informed and trained in a parliamentary office in the city of Sonsonate on the use of the Chivo app. The media company and the ARENA PARTY opposition legislators claimed that this constituted an abusive use of state facilities and a violation of the code of Ethics.