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Is Volcano Energy Really The Best Fit For El Salvador’s Bitcoin City?

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The creation of a Bitcoin City powered by “volcano energy” proposed by El Salvador’s President Nayib Bukele is appealing for many bitcoiners at an emotional, aesthetic level.

Envisioned in the shape of a perfect circle, like a coin, with a bitcoin-symbol-shaped public square in the middle and a multitude of urban nodes radiating in every direction, the proposed city’s aesthetics aim to resonate symbolically with bitcoiners.

This vision makes sense based on Bukele’s communication and marketing savviness. It could also be a great opportunity for Fr-ee, the architecture and industrial design firm founded by Fernando Romero, as Bitcoin City is a rehash of Romero’s FR-EE City, a 2012 “urban prototype for building new cities in the emerging economies of the 21st century,” as the website describes it.

The emotional, aesthetic foundations of Bitcoin City can be viewed as quite sound among Bitcoiners. But its energy foundations may not be the best possible fit for the Bitcoin edifice Bukele wants to spur — at least in terms of their cost and speed.

The Lead Time For Geothermal Power

The “volcano energy” that Bitcoin City is supposed to tap into is more commonly known as “geothermal energy.” Calling it “volcano energy” sounds, of course, more exciting and it demonstrates once again Bukele’s marketing and branding acumen.

The reason why geothermal energy might not be the best and quickest fit for Bitcoin City has to do with its development time and costs. It can take five to seven years to go through all the phases involved, according to some geothermal project timelines.

In the case of the Colchagua volcano, which is the one near which Bitcoin City would be built, the first phases are underway or have been already carried out, as last June, Bukele tweeted that engineers had already dug a well with 95 megawatts (MW) of geothermal capacity at the site.

Even so, it will likely take at least another two to three years before the plant can start generating electricity, to be used for a bitcoin mining hub around it.

This hints at one big reason why geothermal energy has not been significantly developed in the last few decades, either in El Salvador or in the world in general, even though it avoids the drawbacks of intermittency that solar and wind power suffer. Although it’s cheap to operate and provides almost unlimited hours of operation, geothermal energy has very long lead times and, until all of the technical “i’s” have been dotted and the economic “t’s” have been crossed, results are uncertain. Projects can remain, quite literally, holes in the ground.

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