Volcano Energy and Luxor have created Lava Pool, making it the first Bitcoin mining pool in El Salvador. The objective is to tap into the geothermal energy resources of the country. The development comes almost two years after El Salvador announced making BTC a legal tender.
Volcano Energy will now mine Bitcoin in the country and contribute 23% of its net income to the government. This will be done under the private-public partnership initiative. BTC will be mined exclusively from the pool. The Hashrate Forward Marketplace of Luxor will back the operations.
The Marketplace will provide advanced hedging strategies to mitigate the risk of price volatility. This marks another first-movers advantage for El Salvador, with the country already being the first to make BTC a legal tender in 2021. El Salvador has launched Lava Pool with both firms to integrate Bitcoin into the energy infrastructure. This will enable them to leverage the abundant renewable resources in the country.
What could work the most here is the fact that it will generate a lot of revenue for the government of El Salvador. The Central American region of North America, led by Nayib Bukele, will reinvest the profits to work on energy infrastructure. This is expected to boost its economic growth. It is unsure if the entire profit will be reinvested or if a portion will be reinvested. Based on the statement, it is safe to assume that El Salvador intends to reinvest all of its energy infrastructure.
It is important to note that Volcano Energy and Luxor are currently driving the force in the country. There is a possibility that other crypto mining platforms may soon join in to offer their services to Nayib Bukele. Assuming that happens, at the current rate of 23%, it will only bring more revenue for the government and more ways to tap into geothermal energy resources.
Volcano Energy is coming fresh from raising $1 billion in investments in June this year. $250 million has already been allocated out of that investment to develop Bitcoin mining operations and renewable energy operations.
Gerson Martinez, the CSO of Volcano Energy, has underlined the company’s vision. They have said that their vision is to create a vertically integrated energy along with a Bitcoin mining company whose values are deeply linked to investors and the citizens of the country.
Ethan Vera, the COO of Luxor, has expressed his excitement about working with Volcano Energy to launch Lava Pools. Ethan has assured that they will provide all possible support to El Salvador and Latin America in a broader sense. Vera said this after highlighting that the ethos of mining centers around geographical decentralization.
The development has come at a time when BTC miners are exploring more ways to diversify their revenue streams amid the anticipation of digital asset volatility.