After El Salvador, Costa Rica and Bhutan, Indonesia has recently joined the list of countries that have already started or soon intend to start mining bitcoin. The bitcoin mining industry currently stands at $22 billion and is expected to grow in step with the exponential growth in bitcoin adoption in the coming years.
It takes a lot of energy to mine bitcoin. The aforementioned countries have huge reserves of stranded energy. This is energy that can be generated from natural sources such as hydropower and geothermal energy, but that is too far from civilization to be transported for use by people or industry and is therefore lost.
The business case for these energy-rich countries is simple and enticing. Bitcoin is money created by energy. Countries with free energy can convert it into bitcoin and experience a growth in prosperity, similar to the Middle East when it discovered its oil fields. And if they don't want to hold bitcoin they can exchange it for fiat currency.
Miners are constantly looking for the cheapest sources of energy and friendly jurisdictions where they can mine bitcoins unhindered. In doing so, they naturally end up with renewable energy from renewable sources or energy that threatens to seep away because it cannot be used for anything else (hence going cheap). After the attack on bitcoin mining by China, the miners have settled in large numbers in bitcoin mining friendly jurisdictions such as the republican states of America. In Texas, bitcoin mining is used to convert the flares of methane released by the oil industry into bitcoin. Bitcoin mining is also being used to stabilize the Texas electricity network, which is threatened with blackouts by a surplus of energy generated by solar panels and wind turbines. In case of a surplus of energy, bitcoins are mined and in case of a shortage, bitcoin mining is turned off.
It will be interesting in the coming months to see whether El Salvador can free itself from the debt it has with the IMF and the World Bank by issuing its bitcoin-based vulcano bonds. And how Indonesia will develop as the 2nd geothermally most energy-rich country and with 800 rivers suitable for hydropower as a guide country for a global renaissance 2.0 based on a hard bitcoin money standard, just as the golden florin was the basis for the renaissance 1.0 in Florence and Venice.
