By: Alessia Genoves
The increase in billing for the expense of electricity, environmental pollution and economic unsustainability are the main challenges that Salvadoran environmentalists and economists hold to scrutinize the Bitcoin mining project in El Salvador, the most highly valued crypto-currency in the world market that will be in circulation in just a month, as established by the Bitcoin Law in El Salvador.
But the warnings have not been made clear. As confirmed by the Ministry of the Environment and Natural Resources (MARN), the State has not yet processed the necessary requirements for the validation of Bitcoin mining. However, the discontent of the population has already been expressed in at least two unconstitutional appeals, a reform project and a demonstration outside the Legislatvo Palace.
SEE: UFG MORE THAN 60% OF SALVADORANS DO NOT WANT PAYMENTS OR SALARIES IN BITCOIN
Organizations such as El Foro del Agua and the Unidad Ecológica Salvadoreña (UNES) reiterate that the conditions of environmental vulnerability make the cryptocurrency a detriment to life and environmental resources of the country, so the previous month they requested information from the Ministry of Environment and Environmental Resources (MARN), to analyze, among other things, environmental impact studies and technological and energy resources to give sustainability to the project.
“We are extremely concerned about the approval of this Bitcoin project, because in all the studies that have been carried out by research around the world, that tells us that the computer mining necessary to create Bitcoin generates a huge consumption of electrical energy, which translates into in the emission of hundreds of millions of tons of greenhouse gases. This, then, is enough to declare that the Bitcoin project is totally anti-ecological ”, UNES head Mauricio Sermeño told the press.
SEE: LEGISLATIVE ASSEMBLY APPROVES BITCOINS AS LEGAL EXCHANGE CURRENCY
ContraPunto also carried out proceedings before MARN, to expose the development of the mining project. However, the responses were negative. As stated by the State institution in the requirement, of the correlative MARN-2021-186, the “State Portfolio has not received an environmental form”, or start the project from the “Bitcoin mining”, much less related to “The plants that will be dedicated to mining the cryptocurrency Bitcoin.”
Although the official statements of MARN denied the acquisition of reports to exploit natural resources, to give life to the Bitcoin mining project, the Salvadoran president has reiterated the use of renewable energy sources to sustain it, and reduce the required expenses.
“Our engineers just informed me that they dug a new well, which will provide approximately 95MW of 100% clean geothermal energy and 0 emissions from our Volcán volcanoes. Starting to design a complete #Bitcoin mining hub around it “stated Bukele (translation, Counterpoint).
Bitcoin is a digital currency, which makes possible the commercial exchange of goods and services through the internet. To affect this tradability, users access a mechanism “peer-to-peer “ validation based on a chain of blocks (hashes), which are nothing more than a coded set of computational orders, and which record said activities.
SEE: LAW INITIATIVE WILL BE PRESENTED TO LEGALIZE BITCOIN IN EL SALVADOR
As defined by its official portal, BTC offers, among other things “Fast peer-to-peer operations”, as well as “Payments around the world” Y “Very low or non-existent commissions”. This last point, however, dreams of being disputed in the existing cryptocurrency storage services, the purveyor services, or Crypto-Wallets; as well as in those of currency exchange, when charging commissions of up to 12%, in cases such as those of Cripto-Beach.
Despite this, the nature of the currency offers a value with an upward trend, in the medium term, as it is scarce, with a total of just 21 million; and that, in turn, are divisible into 100 million units, known as Satoshis, Likewise,
SEE: THE GOVERNMENT WILL GIVE US $ 30 IN BITCOIN EQUIVALENT TO ENCOURAGE THE USE OF CRYPTOCURRENCY
According to ContraPunto’s observations, the value of BTC has increased to $ 44,838.9 US dollars, surpassing the $ 32,702.03 it had in its last fall; but that does not manage to be greater than the $ 63,109.7 that it came to measure until April 14 of this year; that is, the highest value recorded in the history of the cryptocurrency.
In El Salvador there have been no companies dedicated exclusively to the mining of BTC. However, UNES environmentalists warn that computer mining requires greater consumption in energy coverage, which translates into greater spending on public funds.
“The heat that is emitted into the surrounding atmosphere is equally enormous, increasing the local temperature enormously. (…). In El Salvador they would try to do it with air conditioning devices, which would mean much higher energy consumption and more heat to the environment. There is currently no capacity to supply this increase in consumption, because it is united and sustainable, which would cause the collapse of El Salvador’s energy system ”, holds UNES.
On the other hand, after the president’s statements, the coverage of geothermal energy for mining continues to constitute a challenge for Salvadoran environmentalists, who argue that it would contribute to the ecological impact. They argue that mining activities could increase greenhouse gas production.
“We consider serious the offer made by the President of the Republic to promote Geothermal Energy for Bitcoin Mining, as “Clean Energy” when in reality it generates negative environmental impacts in the nearby communities where it is developed, by affecting the quantity and quality of water. of aquifers, cleaning of geothermal wells and damage to biodiversity when drilling new wells ”, Add.
In the official statement, the organization cites the report entitled “3dr Global CriptoAsset BenchMarketing Study”, from the University of Cambridge, which indicates that, as a result of mining, greenhouse gas emissions in China are higher than of 130 million tons; and that the world production of the currency could be equivalent to the annual energy consumption of countries like Finland and China.
The study also refers to the fact that only 36% of the world production of BTC is from renewable energy sources; mostly from hydroelectric plants.
But the warnings from environmentalists are yet to be seen. MARN has confirmed that the required documentation for cryptocurrency exploitation projects has not yet been processed at its offices.
“Due to the fact that no environmental form has been received, to date on the subject of mining, such information is not available “, he reiterated to ContraPunto.
It also declares that the State portfolio has not required additional financing to that of the General Budget of the Nation, for the management of the project. On the contrary, the management of the environmental impact studies are carried out under the established budget.
SEE: EL SALVADOR WILL HAVE TECHNICAL ASSISTANCE FUNDS FOR THE USE OF BITCOIN THANKS TO CABEI
More than 60% do not want Payments or Salaries in BTC
Despite the upward trend of the cryptocurrency, risk rating agencies such as Moody’s, and other members of the United States Federal Reserve reiterate inflationary risks, due to its volatility; as well as the increased risk of bank intervention “Since those ofposites will move to bitcoin ”.
SEE: MOODY’S CONSIDERS THAT BITCOIN WILL RISK MONETARY STABILITY.
“It is very likely that the adoption of bitcoin entails risks for the stability of the monetary regime, undermines the economic policy framework of El Salvador and adds uncertainty to the negotiations with the IMF “He declared in a statement on June 16. “This would add pressure to their profitability as financing costs rise as a result of a substitution and as they face increased competition in their payments and transfers businesses,” added the agency.
However, some of the representatives of the Salvadoran business sector, such as Javier Simán, have expressed their rejection, suggesting the repeal of the law. Likewise, economists, Rafael Castellanos and Oscar Cabrera Melgar reiterate the unsustainability of the electric power production project for mining the currency; as well as the unviability of the cryptoactive in the economy, due to its volatility.
SEE: ABANSA ANALYZES THE TECHNICAL AND OPERATIONAL PROVISIONS OF THE BITCOIN LAW
“We respectfully suggest that the deputies repeal the Bitcoin Law. Most people don’t want bitcoins but dollars. In less than 30 days it goes into effect and the government has not yet issued regulations on how it will work! ”, Simán expressed this week, from his official Twitter account.
Among other things, more than 60% of Salvadorans do not prefer to receive salaries or receive payments in bitcoin, according to the latest survey by the Francisco Gavidia University (UFG), entitled “Salvadorans have an opinion on the Bitcoin Law. Do they accept and receive? report in which, however, more than 46% of Salvadorans declared they did not know about the issue of Bitcoin.
As a result, representatives of Salvadoran party politics, such as the deputy of the Farabundo Martí National Liberation Front (FMLN), Jaime Guevara, filed an appeal of unconstitutionality, together with other non-governmental organizations, alleging that the Bitcoin Law was proposed and approved in an uncultivated way.
SEE: UNCONSTITUTIONALITY IS FILED AGAINST THE BITCOIN LAW
One month after the complaint issued, on July 21, a group of protesters led by the movement “Block of Resistance and Popular Rebellion” He reiterated his complaint, addressing the Legislative Assembly to deliver a piece of correspondence, in which they requested the repeal of the law.
SEE: A GROUP OF CITIZENS MARCH AGAINST THE LEGAL COURSE OF BITCOIN
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