Will geothermal energy revolutionize the Bitcoin mining industry? That remains to be seen. However, El Salvador’s volcano mining plan is well underway. So, of course, famed economist and Bitcoin denier Steve Hanke had to publicly criticize it. He wasn’t counting on President Bukele’s social media strategy, though. He got schooled and then some.
Did Hanke make a tactical error by speaking on something so out of his field of expertise as geothermal energy?
It all started with… a Bitcoinist article. When we covered Anita Posch’s journalistic report on everything related to El Salvador’s Bitcoin adoption, we said and then quoted her:
“The hardest revelation, though, is this. The volcano that would power Bitcoin City and the country’s Bitcoin mining might be dead.
“The city shall be powered by geothermal energy that is completely CO2 emission free. The energy is also planned to be used for Bitcoin mining. Yet the problem is that it is uncertain whether the volcano should be considered active. I was told that the volcano is dead, and there is no geothermal energy left to be used.”
Did we make a tactical error by writing about something so out of our field of expertise as geothermal energy? Yes, we did. And Hanke, linking to our article and writing to the President directly, said, “Nayib Bukele’s proposed Bitcoin City is as prepared as Florida is for snow. The advertised power source for the City is an inactive volcano. This is just more attention-grabbing antics from a narcissistic president who is full of hot air.”
.@nayibbukele's proposed Bitcoin City is as prepared as Florida is for snow. The advertised power source for the City is an inactive volcano. This is just more attention-grabbing antics from a narcissistic president who is full of hot air. https://t.co/J53p6NJgHN
— Steve Hanke (@steve_hanke) January 7, 2022
After that, the party started.
What Did Bukele Teach Hanke About Geothermal Energy?
Leaving diplomacy for another day, President Bukele went for the throat. “Of course is an inactive volcano you id10t! Most geothermal power is extracted from wells near INACTIVE VOLCANOES! Why would you build a city below an ACTIVE VOLCANO?” That’s a burning question.
This guy 😂
Of course is an inactive volcano you id10t!
Most geothermal power is extracted from wells near INACTIVE VOLCANOES!
Why would you build a city below an ACTIVE VOLCANO? 🤦🏻 https://t.co/HGh6UGZ0u0
— Nayib Bukele (@nayibbukele) January 7, 2022
This certainly makes this Stephen Colbert short sketch even less funny than it already was:
Hanke had ample opportunity to just stop. And information to know that both Anita Posch and we were probably wrong. Blockstream’s Samson Mow told him, “All the existing geothermal plants in El Salvador, like the Berlin facility, are around inactive volcanos. If you don’t know anything about the subject, you should just keep your mouth shut.”
All the existing geothermal plants in El Salvador, like the Berlin facility, are around inactive volcanos. If you don’t know anything about the subject, you should just keep your mouth shut. 🤦🏻♂️ https://t.co/TIC37NoYxU pic.twitter.com/GceAMiS983
— Samson Mow (@Excellion) January 7, 2022
Did Steve Hanke listen?
BTC price chart for 01/10/2021 on Bitstamp | Source: BTC/USD on TradingView.com
Where’s The Feasibility Study? Or, How Much Is Too Much?
To begin round two of the geothermal energy battle, Hanke went full academic. “How much energy can you extract from the inactive Conchagua volcano? Where’s the feasibility study? El Salvador already has an enormous energy deficit & imports 22% of its electricity use. Without a feasibility study, no one knows how Bitcoin City will affect this deficit.”
Ok, ID-10t, I’m going to school you again, not because it’s going to be of use for you, since you’re just getting paid to attack #Bitcoin and defend fiat, but because the people deserve to know you are a fraud. https://t.co/BbDGGnyjuu
— Nayib Bukele (@nayibbukele) January 8, 2022
Was that necessary? He definitely can’t blame Bitcoinist or Anita Posch for this one. The following is a summary of the detailed takedown of Hanke that Bukele disguised as a lesson in geothermal energy. Before that, he insulted him. And claimed that Hanke is “just getting paid to attack Bitcoin and defend fiat,” and that “people deserve to know you are a fraud.”
Facts About El Salvador’s Geothermal Energy Plans
In the thread following that first attack, President Bukele said:
- “El Salvador doesn’t have an energy deficit, in fact, we can produce twice the energy that we consume.”
- “The reason we still import energy is because we are part of a regional open market and energy producers in other countries still beat some of our producers in price.” For now…
- El Salvador has more than 170 volcanos, huge geothermal energy reserves.
- “We’ve dug new wells and we are planning to increase our geothermal production… by a lot.” And he links to a Twitter thread that Bitcoinist covered here. The thread is about just one well.
- So far, they’ve dug four wells, “and we’re planning to put some of the excess energy into Bitcoin mining and the initial powering of Bitcoin City.” One of those is in “the “inactive” Conchagua Volcano.”
So the “inactive” Conchagua Volcano is perfect to power #Bitcoin City, but of course we picked that one (from the 170 we have) for the view… pic.twitter.com/wV2J61JIJH
— Nayib Bukele (@nayibbukele) January 9, 2022
Notice that in this tweet, President Bukele includes graphics from a “feasibility study” of sorts. Then, he closes with class, “So the “inactive” Conchagua Volcano is perfect to power Bitcoin City, but of course we picked that one (from the 170 we have) for the view…”
Will Steve Hanke come back for more? We doubt it, geothermal energy is outside of his wheelhouse and it shows.
Will Steve Hanke keep attacking El Salvador’s Bitcoin strategy with every inch of his being at every chance he gets? Absolutely. That’s his job.
Whatever happens, you can count on Bitcoinist to keep you posted, informed, and entertained. That’s our job.
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