Bitcoiners - Live From Bitcoin Beach

How a $300M Bitcoin Mining Project Is Being Built in El Salvador | Josue Lopez

• Mike Peterson

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What does it actually take to mine Bitcoin in El Salvador? In this episode, Mike sits down with Josue Lopez, CEO of Volcano Energy, to break down what’s really happening beyond the hype. Josue explains how his team is building energy infrastructure from the ground up, solar, wind, and geothermal, to support a truly sovereign energy mining operation. This isn’t about plugging into someone else’s grid. It’s about designing a system that El Salvador controls end-to-end.

They get into the details of mining economics, from why electricity in El Salvador is so expensive to how immersion cooling made it possible to run ASICs in a tropical climate. Josue also shares why Volcano Energy has already raised nearly $300 million and how the team is balancing short-term returns with long-term strategic goals. Whether the energy gets sold to the grid or powers Bitcoin mining directly, the goal is the same—build assets that last and reduce dependency on unstable jurisdictions.

The conversation moves beyond Bitcoin into national development. Josue explains how energy, safety, and financial inclusion are all connected. They dig into El Salvador’s massive housing shortage and why his fund is stepping in to build low-income homes designed for families earning minimum wage. It’s a look at what Bitcoin infrastructure really means when it’s tied to place, people, and policy.

If you’ve ever wondered how energy mining works in the real world, or whether a country like El Salvador can build from scratch without relying on legacy systems, this episode is for you. Hit subscribe, drop a comment if your electric bill has ever made you consider going off-grid, and share this with someone who still thinks mining can’t work in Central America.

-Bitcoin Beach Team

Connect and Learn more about Josue Lopez
https://x.com/josuelopezgal 
https://x.com/Volcano_Energy 
https://volcano.energy/ 


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Browse through this quick guide to learn more about the episode:

00:00 — Can El Salvador actually support Bitcoin data centers?
01:48 — Why did Josue Lopez leave El Salvador and what brought him back?
06:29 — How did Bitcoin solve banking challenges for international students?
08:41 — What changed after China banned Bitcoin mining?
15:21 — How much has Volcano Energy raised and where is it going?
20:08 — Why are electricity prices so high in El Salvador?
24:32 — How immersion cooling made energy mining possible in hot climates
34:42 — Should you mine Bitcoin or just sell power to the grid?
39:50 — How geothermal energy fits into El Salvador’s energy infrastructure
53:26 — Why financial inclusion depends on more than just Bitcoin

Live From Bitcoin Beach

Josue Lopez:

The stability of El Salvador for I don't know, AI companies to come and build their data centers. I mean, you know that things in El Salvador changed in 2019 and they're never going back. I mean, El Salvador is never going to be the old. El Salvador ever again, because of the switch has changed in Salvadoran people. The reality is that financial inclusion requires peace and stability. First of all, now violence is gone, but we need to give an adequate living standard.

Mike Peterson:

You who sway? I'm super stoked to have you here, because I've got lots and lots of questions for you.

Josue Lopez:

No, thanks for having me.

Mike Peterson:

Yeah, I'm gonna, I'm gonna get my money's worth out of the time we have with you here today. Make sure I come out of here understanding the energy sector, sure. But first to start that off, you know some of the people that watch the podcast will will know who you are, but a lot of them won't. So would love for you to kind of give people a little bit of background. And I love your story because it's, I feel like it exemplifies everything we're seeing here in El Salvador, like somebody who had felt they had had to leave because there was lack of opportunities and lack of safety, who's like, come back and feeling that El Salvador is one of the best places to be. So give us a little bit of your history of what took you to Switzerland and what's brought you back here.

Josue Lopez:

Awesome, for sure. No thanks for having me. So just a quick rundown. My name is Josue Lopez. I'm the CEO of volcano energy and a partner at type one capital. Well, I'm I was born and raised in El Salvador. I lived here most of my life. You know, was a tough time growing up here, because obviously violence and all those things you hear about. It was, well, now we know it as the old El Salvador, but back then it was, it was tough living here. I mean, parents being worried all the time when you were going to school or going out, if you were going out, and stuff like that. So I decided to leave you.

Mike Peterson:

You grew up here, but you speak perfect English. So did you did that come from your time overseas? Or did you go to one of the international schools here? Or why were English so good?

Josue Lopez:

Yeah, I went to an international school. And I used to travel around a lot when I was a kid as well.

Mike Peterson:

Which Which school did you go? If you know the British school, the British school, okay,

Josue Lopez:

you would have known, because my accent is all

Mike Peterson:

Yeah, yeah. Your accents not British. But I had a British. daughter that went to the American School and a son that went to the international school, so we didn't experience the British school. But I've heard good things about it.

Josue Lopez:

Well, back then I could pull out a very mid British accent. Not anymore, anyway. So obviously, I lived here through the through the bad part of El Salvador, but at the time, you know, it just felt like El Salvador was the normal. just doing homework and getting good grades and getting to a And what we knew, good school and all that stuff and and in the background was obviously all the violence and all the things that we didn't know we couldn't do because we were just, you know, we were born that way. It was a normality for us

Mike Peterson:

guys. Just a brief interruption. We'll get back to the exciting show here. But I just want to really ask a favor that you guys could make sure that you're subscribed. If you're watching this on YouTube, if you are listening to this on a podcast, please take a second and review this. You know you don't even have to write a lengthy review or anything at all. Just click the number of stars that you want to give us. It really helps us in the algorithms to make sure people are finding out about what's happening here. All right, back to the show.

Josue Lopez:

So my story is very similar to most people that come from international schools in El Salvador. You've probably heard a lot of similar stories. As soon as they're able, they just leave because there's no opportunities in El Salvador, or there was no opportunities in El Salvador. So you get into a you know, the roadmap is you get good grades. You never go out, because you're gonna get killed or kidnapped or whatever, and then you graduate, then you leave El Salvador, and you usually never come back. So that's what I did, or that was my roadmap. I mean, I left as soon as I could when I was 17 or beginning of 18.

Mike Peterson:

Is that when you went to Switzerland, or did you go?

Josue Lopez:

Well, I went to the US first, okay? And then for university, yeah, for university. And then after a semester, I decided I wanted to live in Switzerland. I wanted to study economics and math. so I went to this.

Mike Peterson:

What year was that?

Josue Lopez:

Just for 2018 Okay, yeah.

Mike Peterson:

Oh, man, you're young. Wow. 25 Wow. Crazy. Anyway, half my age, literally,

Josue Lopez:

anyway, around that time, I went to this forum called the Alternative Investment Summit in Geneva, and I met my soon to be professor, and he spoke about Bitcoin. He spoke about all these things and how Bitcoin was borderless. It was censorship less. It was decentralized. And I really liked the idea of it, so I started, you know, I would say, at that time, playing around with it. And it was very hard moving money from El Salvador to Switzerland, because banks here are terrible. Yeah. So in order to do an international transaction, you would have to pay five to 10% It was horrible.

Mike Peterson:

And that's if you could get them to actually release it and flag it and hold it exactly.

Josue Lopez:

And at that time, my parents paid for my school, paid for my living and all that. So I wanted to find cheaper ways to move the money around. So I just they had a friend that sold them Bitcoin, and they moved it, and then I sold it in in Switzerland. Then I got the Swiss francs, and it worked perfectly. I think I ended up paying, like, two or 3% which is very expensive now, but it was amazing.

Mike Peterson:

And probably, like, you know, 10 times as fast as you would have waited for the wire to click Exactly.

Josue Lopez:

But I did it as an experiment. You know, I didn't do it periodically. After that, it was just my normal credit cards and so on. I didn't know my life would fall back into bitcoin eventually. So I started working at this fund,

Mike Peterson:

which we're in Switzerland. Were you in Geneva?

Josue Lopez:

Okay, so I started working in this private equity fund, and they had this thesis of investing in disruptive technologies. So we would do everything from agriculture, online market investing and and sort of digital pharmacies and all these really cool things that I was very attracted to as a young guy. the election here. And I would always tell my board like, listen, let's invest something in emerging economies, particularly El Salvador, but if not somewhere in Latin America, that would be fine, but it was always our resounding no with quotes of credit ratings and and violence and corruption, which was easy to understand, I mean. And they were right, yeah, you know?

Mike Peterson:

Well, the Swiss tend to be a little risk averse, exactly.

Josue Lopez:

And I think I was probably in the most risk tolerant fund in Switzerland. And even they were like, No, we're not gonna invest in Latin America. But anyway, around 2019 we well, the fund decided to launch their Bitcoin mining initiative. It's a really nice venture. We had to learn it from the ground up, and it grew like weeds. I mean, at the time, Bitcoin mining was not popular like it is now, just a couple of people were were mining Bitcoin. I think the entire hash rate might be mistaken, but it was probably around 30 or 60x a hash so it was, you know, a 10th or less of what it is now. And we started mining using cheap Nordic energy. So we started in Norway, and it eventually grew.

Mike Peterson:

And was that like geothermal or mostly hydro?

Josue Lopez:

Mostly hydro, okay, but that gave me the first I would say, actual interest in Bitcoin. As I said, before I had tried it, I had used it, but more as an experiment. I never saved in Bitcoin. In fact, I'm ashamed to say, but I'm sure it's a story of many Bitcoiners that, you know, once I got tired with Bitcoin, and I was like, oh, it's Bull Run is over. I'm gonna try with with other shit coins and all coins. So I had my, you know, my period of disgrace and and playing around with all those memes and stuff. But then I got back, you know, I got cleansed. And, yeah, we started mining a lot of Bitcoin. It soon became, as I said, the largest European miner in the world.

Mike Peterson:

Were you guys just mining in Europe or, okay, we were.

Josue Lopez:

this thing in China happened where, I mean our we saw our revenue sort of levelize as more people were catching on to mining, and then suddenly them, the hash rate market went to half because China banned mining. And so it was another Bull Run, not only for Bitcoin, but it was a bull run for for

Mike Peterson:

So you guys didn't have any exposure in mining as well. China, so it was all upside for you.

Josue Lopez:

Was all Europe, and we were already hosting so so your price, once things blew up in China. Everyone was trying to get their machines out and host them somewhere in a, what we call the stable jurisdiction and, and so, you know, we, we were overflowing with demand. Yeah, we it mean, we started off loading our shares in the company and and just sort of diversifying the funded, yeah, and diversifying into other things like data centers or hpcs, you know, high powered computers and so on. So yeah, around a year later,

Mike Peterson:

was it hard for you to get used to that, like, especially being gone and then coming back, and because you, you grew up with a sense of like, Oh, we don't go to these areas. Or you don't go out at night. You don't, oh, why doesn't that place have some a guard with a gun out in front it must not be safe to eat there. Like, was it? Was it hard for were you able to kind of like, or we, did it seem normal since you were coming from Switzerland? And then,

Josue Lopez:

I mean, the first time we came, I came with, with my, my former partners from Switzerland, and I remember the the Fund had arranged two cop cars to like, to escort us everywhere, and then we would drive around in a car. And it was just so normal, you know, that felt normal. and. One of the

Mike Peterson:

I don't know if it's public or not, how much you raised, or if you give us a ballpark, but

Josue Lopez:

we've raised close to 300 million and executed close to that amount. A big chunk of that has been in energy and infrastructure and tourism. So it has been quite amazing the fact that El Salvador now has the well, it has the access to this capital, yeah? Because back then, the only way that entrepreneurs could build their companies was through debt.

Mike Peterson:

There were no capital markets. And even that was expensive.

Josue Lopez:

I mean, it's still expensive, so 10 to 14% it's crazy. Risk capital was not even something you not even in the vocabulary of Salvadorans. And things started changing. I mean, El Salvador became more attracted more and more capital started flowing in, particularly Bitcoin sort of related capital. So I was obviously tied to the bull markets and the bear markets. And, yeah, I think particularly the bull markets. People were very interested in mining in El Salvador. But I think, you know, back then, I had a tendency that, uh, or strategy, was to turn our Bitcoin mining farms into into what we well, what we still call sovereign mining farms. I mean, we didn't want to depend on someone else's energy that could one day just tell us, listen, we're gonna sell this energy to you 10 times more expensive, or we're just not gonna sell you energy because you're using it for Bitcoin. And I don't believe in Bitcoin, so we so we started with this idea in El Salvador that if you really want to be sovereign, then you need to own the the generation. You need to own the the energy that you're using. And that really doesn't happen in any hydrocarbon sort of sphere where you're using natural gas or you're using coal or oil or whatever I mean, unless you're a massive company and you actually extract the natural gas, you're probably just buying from the US or Russia or, you know, some other jurisdiction that can be geopolitically influenced against Bitcoin. And I mean a good, a good example of that is China in 2021 which we just discussed. I mean, in the flip of a switch, the click of a button or the signing of a paper, they suddenly cut 50% of the hash rate. And you know, the same thing could happen now, say, if the US suddenly decided to ban Bitcoin mining, it's obviously not going to happen now, but it could have under, under Biden, it could have definitely been a possibility, and they immediately eliminate more than 50% of the hash rate. So I decided I wanted you know. I envisioned a site that produced off grid its own energy, and it used that energy to mine Bitcoin, and that was it. I mean, you know, you generate energy, you consume it on Bitcoin mining. And so obviously we have to look at the forms of energy that could achieve that, but also the resources available in El Salvador. And I mean, that was the real sort of limit, or the test, yeah, yeah.

Mike Peterson:

So I remember when you guys made the announcement, and I will just be blunt, like I thought, Okay, this is just like a marketing gimmick, because I've lived in El Salvador for a long time, and the electricity here is ridiculously expensive. It's one of my biggest complaints, and the climate doesn't seem great for for mining either, because it tends to be hot and humid. And so I've always been perplexed at, okay, how, how is this economical, or how can this actually work as a business? So that's why I'm excited to have you here to explain it. And I don't pretend to know the energy markets or to no mining. But just from my experience, when people had asked me, I was like, Yeah, I think it's just like a marketing thing. I don't think it's real. So tell me

Josue Lopez:

it was the usual response back then, and we were okay Completely unfeasible. So we were okay with the response. I mean, it's, it's ridiculous, yeah, so,

Mike Peterson:

and you need to be more like $30 right?

Josue Lopez:

Yeah. I mean, to be sort of one of the big competitive firms in the world, you need to be from inside the 25 to $35 range. So, you know, it's impossible, yeah, 10% of what the retail prices in El Salvador, that's what you needed.

Mike Peterson:

And I had known even, even going back, you know, 10 years, that was one of the clients. I heard from people in industry here was, yeah, the wages are good and competitive, but the power prices are so high that any industry that consumes a lot of power is just not economical.

Josue Lopez:

Yeah, it's they're extremely high. And, a lot of big renewable so we have a lot of hydro, which is our main generator. About 34% of our energy is hydro.

Mike Peterson:

Is it that high? Huh? It's that high, yeah. Okay, there's a lot of hydro. And is that more recent as they I know, they brought a new

Josue Lopez:

no system on and the first big hydro, which, if I'm not mistaken, it's a Ron Grande, and I don't have the actual numbers right now, but it was built in 1955 and it was our first sort of us sponsored energy project, and we built that massive dam that it flooded a big part of El Salvador. We have a very large artificial lake called su chitlan. It's a damned lake. And

Mike Peterson:

is that by such a total

Josue Lopez:

Yeah, someone you see from the which is an amazing town, by the way, yeah. Anyway, back then, you know El Salvador, as in many other countries in Latin America, was flooded by corruption. So if you had a budget of, say, a billion dollars, only 20% of that would actually reach the project, and then 80% of that would just disappear through the, you know, hands of corrupt officials and other countries and and so on. Or we would have to sign massive debt agreements that would essentially yield the price of that energy to be a ridiculous amount. So we're paying the price of very expensive energy that was developed in the 50s and the 60s. Our first geothermal plant, if I'm not mistaken, came in in 75 then the second one in 92 then now we obviously have natural gas, which is not much better, but it's,

Mike Peterson:

I mean, that's basically diesel, or the low grade diesel.

Josue Lopez:

That's low grade diesel, very bad for the environment. Not that I'm a massive environmentalist, but,

Mike Peterson:

but but that's still a large percentage is is produced that way, right?

Josue Lopez:

Not anymore, but it is the last generator, okay? And the way, you know, in a nutshell, and I mean, there is a very complicated formula to to get the energy price for every individual in El Salvador, but in a nutshell, pretty much it is the price set by the most expensive and final generator. That's the price that the entire system has to pay. So those diesel generators that are extremely inefficient and very expensive, they set the price because in you know, energy is an amazing business, because the economy cannot afford to make you lose they have to make you at least break even. You know, if not, you lose money, then you turn off your plant and no one has energy. So the system has to ensure that those bunker plants, they make enough money so that they can continue supplying that, that small portion of energy that that they still supply 8% or so. So that's, you know, a couple of reasons why the energy price is more expensive. Now, you mentioned cooling. I mean, it back then, when we first came here. I mean, we knew we couldn't mine in El Salvador, back in 2021, 2022, or so. You know, immersion cooling was just starting now, it's the industry standard.

Mike Peterson:

Now, does that mean it doesn't really matter the ambient temperature of where you're mining, or does it still have some impact?

Josue Lopez:

It has very, very small, a very, very small impact. I mean, I've mined in the north of Norway, in moirana, in Alta Finland, which are extremely cold places. And we've mined in Colombia, in Paraguay, we mined in Ethiopia. We mined, you know, in extremely hot and arid places. And, you know, performance is pretty much the same if you're immersed. at most. Maybe you'll have to cool the liquid a little bit more, but it will not result in a in a significantly different operation, makes sense.

Mike Peterson:

So now the now the humidity doesn't have an impact either. Once you imagine your mining, yeah, yeah,

Josue Lopez:

and yeah, for those that don't know, immersion cooling is sinking your machine in mineral oil and and cooling that oil or that liquid, so that keeps it, but anyway, so now the barrier of harder, hot and cold, or what hemispheres I can mine in, it didn't exist. It doesn't exist anymore because of immersion cooling, but back in in 2019 and

Mike Peterson:

it's just just curious, what percentage of mining now is immersion? Is it like 90% or is it if, if,

Josue Lopez:

but mining in Central America was unheard of. I mean, there's no way it's way too hot. But now it really doesn't matter. That's interesting, yeah, because I always wondered that.

Mike Peterson:

That's one thing that could never make sense to me. But yeah, the way you explain it, yeah.

Josue Lopez:

And we tested it here. We tested. We started testing in 2022 we launched our first mine here, just to sort of test out whether we could air cool. You know, our geothermal Salvador and geothermals are way up in the mountains, where the where it's not so warm, I mean, I mean, it's a little bit cooler. So we started, yeah, but

Mike Peterson:

I remember seeing the ones like the ones in Berlin, and those were all air cooled, at least initially. And so that's why I kind of, yeah, no.

Josue Lopez:

And you know, that was the result of testing a lot of different ASIC models with a lot of cooling options. I mean, we ran air conditioners. We ran we were trying to find the most efficient way. So obviously, if we put air conditioners on, they would work, but it would be too expensive. So we tested a lot, and then the geothermal mining that's happening currently in El Salvador is a result of that. I mean, we didn't have to immersion cool the ones up in the volcano, because, you know, it's, it's pretty cool there. If I were to go back, I would probably immerse them. But back then, immersion cooling was very expensive as well. Now it's still a significant CapEx, but it's not as bad as it was back then, where you would almost spend twice your mining topics on, on cooling alone.

Mike Peterson:

So, so you guys have solved the heat and the climate issue, but, but how do you solve the more like, yeah, blatant. Like, power prices are just crazy high here. I mean, I know every time I get my electric bill, every month, I'm just like,

Josue Lopez:

yeah, you all you need solar panels. But, yeah, I mean, you know, it seems like the unsolvable issue, and it's why, you know, we started investing in, you know, a lot of other things. We started generating energy, and we started investing in tourism and infrastructure and so on. Way before we even thought about mining in El Salvador. I mean, we thought about it, we just very quickly realized that it was unfeasible. So

Mike Peterson:

what type of tourism things were you guys investing in? And I don't know if it's public or not, if you can't

Josue Lopez:

mention it. I mean, we were analyzing restaurants, hotels and so on. We wanted to open the tourism market, which was, obviously, it was booming. It's still booming. Real Estate. Market is also booming. So, you know, we were focused on that, on leveraging the fact that El Salvador was growing. So we started buying real estate and and, yeah, and tourism and so on. But obviously, what we did want to do is mine in Bitcoin country, because if there is one thing that we've always protected as a as a vision, is that that we could easily mine in countries that are very cheap to mine, like Russia or Georgia. Was Georgia the country, not the state. They have very cheap energy. And you could plug in and mine there, or many countries in South America, very, very cheap energy. A lot of people gone. But Paraguay, yeah, exactly. But, I mean, does it really make sense when, I mean, are you solving an issue? When you go plug in, use a some of their energy, but then, after a year, they're gonna either seize your machines, they're going to increase the price of your energy, and they're just going to destabilize the hash rate, which, by the way, is extremely volatile. I mean, hash rate has been growing all the time, but, but it's very volatile. There's a lot of drawdowns and so on, which they're not good for the for the Bitcoin network. And, yeah, I also just want to say that I don't believe that you can accumulate more Bitcoin by mining rather than buying it. For most people, it is better to just buy bitcoin. Hell, even for us, it's we would have more Bitcoin now if we would have just bought a lot of Bitcoin at the time rather than invested in a lot of ASICs and, you know, and mine Bitcoin. But, and this is something that we know, our investors know, of course, but we decide that, you know, we want to be part of the Bitcoin network, and a very big part, I mean, a very important part of the Bitcoin network are the miners. But I just wanted to clarify that we're not doing it because we want a huge mountain of of Bitcoin in the end. I mean, we know we'll have probably less Bitcoin. That was if we just bought a billion dollars in Bitcoin, right now, we'd probably have more Bitcoin than than if we just invested a billion in mining, but, but we're okay with that. So we had to, the way we had to solve it was developing our own energy, and that's how we solved it. In the end, we ran a couple of proof of concepts. We developed some hydro plants. We developed some PV plants.

Mike Peterson:

We PV? Is that solar? Yeah, okay.

Josue Lopez:

We analyzed the data for the existing wind generators, and we analyzed the geothermal generators. We tried to figure out a way that we could lower the price of energy for ourselves. And here's where, where it all comes down to which is LCOE, which is levelized cost of energy. So if you generate your energy, that energy has a cost, and it really depends on what sort of energy, but say on PV, it's on solar, it's the amount of megawatts that you're going to produce in 25 years divided by the capex of your of your operation, or the other way around, and that gives you your cost per megawatt hour. And so the problem with solar is that obviously it only generates when it's the day, yeah. And so we also looked into wind. Now, wind has a very similar LCOE. As long as we were able to control the costs significantly and maintain a decent topics, we could lower the LCOE, we could lower the cost of the energy to be competitive with other markets while still maintaining jurisdictional security, which, in my opinion, jurisdictional security is much more important than your energy price. I mean, as long as you're not losing on your energy price, you should be caring more about the longevity of your operation, but, but

Mike Peterson:

just from a business point of view, not, you know, take away like, your desire to protect the Bitcoin network, like, wouldn't you still be in better position to just sell your power to the general market in El Salvador at that point, because it's it starts at such a high level that it seems like it'd be a very profitable energy market to enter if you were able to produce at a cost that was even somewhat competitive to be mining with. I

Josue Lopez:

mean, in the end, we are, you know, so right now we're, we're funding our geothermal operations. Because the the thing about geothermal is that it produces 100% of the time. It's not intermittent whatsoever, but it's also very expensive and it takes a long time. So when. Order to reduce the cash burn that's associated with geothermal, we're developing wind and solar, which is intermittent, or we have developed, sorry,

Mike Peterson:

you said geothermal, and then you said hydro, which, which, which

Josue Lopez:

geothermal, geothermal hydro is. We immediately realized that it was a no go, okay? Because, well, you've been around El Salvador rivers aren't exactly, you know, they're not flooding. No, we don't have many rivers to power more hydroelectric and so to answer your question, I mean, we are selling to the grid. Okay, that's a good thing about El Salvador, which is that, well, the good thing for the generators and bad thing for the consumer is that if you're a consumer, you have to pay very expensive, a very expensive price of energy. If you're a generator, they have to pay you a very expensive price for the energy. So, you know, when we generate energy, we sell it into the spot market, because we're producing intermittently. We're not producing 100% of the time, which is what you need for mining Bitcoin need energy all the time. So during the day that we're producing a lot of wind and solar, we sell all of that to the grid. We self consume a portion of it. We sell the rest of the grid, say 80%

Mike Peterson:

and is that, you know, I know that that a lot of times solar and wind are producing at times when the system doesn't need it in El Salvador, does the system need it during the day? Absolutely.

Josue Lopez:

El Salvador is one of those energy economies that don't fluctuate significantly during the night and day, because the way our industry is composed. We have a lot of maquilas, a lot of sort of textile manufacturers that work three shifts, so they work, you know, around the clock. So that that isn't to say, I mean, we know that with the energy that we are building, we can probably build out a bit more solar, and that's it. I mean, I don't want El Salvador to become a solar dependent country we've seen how that turns out. I mean, Germany. So our our play is more long term. I mean, we're building wind and solar, so we can just mine with cheap energy. Yes, we could probably sell it to the grid, and I wouldn't say, make more money, but we could probably make money safer. But backtracking and looking at spot market prices and what is called hash price, which is the price in Bitcoin per PETA hash, or terahash, that they will that the network pays you for mining, I would say a really good estimate is that you will make more money mining Bitcoin than selling it to the spot market. But we have the best of both worlds. I mean, when, when mining is okay, we can increase the efficiency of our miners by decreasing the the consumption, and mine Bitcoin with it. While we're still selling to the grid, we can sell to the spot market and we can consume it, but either way, our intention right now is not really making a massive profit. We're generating revenue and all we really just want to reduce the cash burn with geothermal. That's the end goal. We want to be the first private company in El Salvador to develop a geothermal energy plant and and

Mike Peterson:

so do you guys have, like, a plant construction going on right now? Yes.

Josue Lopez:

So we have, well, we have several, okay, so we have metapan, which is a wind plant in El Salvador. There's really only one hot spot for wind energy, and that is in the northern side of El Salvador in metapan. So we're developing 52 megawatts of energy there. We're developing 54 megawatts of solar in a location I will not disclose. We're also building two transmission lines, 138 kilometer and one seven kilometer. Both are 115 kilovolts. And then the one that is, you know, the furthest down the road is, sorry, the one that's more advanced in construction is the concha solar plant. That's 36.4 I'll show you some photos, and maybe you can post them on the video. But we're, we're making amazing progress on that. And then also in conchava is the geothermal plant. So through a lot of, I would say, desktop and and surface studies, we have identified a geothermal reservoir that we can dig into. It still means that we need to dig 1500 meters down the earth, through rock, through all that

Mike Peterson:

heat. And is that considered? I've read some stuff talking about the theoretical like super deep wells. Would that be, or is this? Is that a super deep. Well, or is that just the normal stuff that El Salvador is already utilizing? Yeah, it's

Josue Lopez:

a normal stuff El Salvador is already utilizing, but I wouldn't say it's a normal stuff for geothermal. They're usually deeper down, and then it's not one of those super deep, like the coldest, super deep that, if I might be mistaken, but I think it's 12,000 meters. Okay, so it's no nowhere, nowhere near that. It's a conventional well. It's also a conventional geothermal energy plant, you know, a binary cycle. You You bring up heat from the geothermal reservoir, then you re inject water, and then you sort of, you know, you maintain that binary cycle so that you can always extract energy from it.

Mike Peterson:

And is there, is water scarcity an issue in that process? I know El Salvador has a lot of precipitation, but is it, is that an issue? Is that environmentalists bring up, is it,

Josue Lopez:

at least not, not at this stage, that we're not and I just want to make that clear, we're not generating now. So it might be when we get to that stage in three or four years, but it is not now. I mean, according to all the studies, and we've done hydrology studies, we've done geohydrology studies as well, there is no there's not going to be a shortage of water. Okay, I would say the largest risk right now for developing our geothermal punt is that we don't hit the spot. I mean, that's a problem with geothermal. I mean, it's,

Mike Peterson:

can you not just like, use imaging in the ground to see where it's hot and drill into that, is that? I mean, is that way too simplistic, or what's

Josue Lopez:

it's way too simplistic, but it's also a very simplified version of what they do to, sort of, you know, they collect fluids and liquids, and they do a lot of sort of geological tests, definitely not so deep as to know for sure, but it gives you a really good idea of where to dig. And, you know, by the time you dig, you dig a confirmation Well, which will essentially confirm the resource. And then you dig your production wells, which, those are the actual ones that go to 1500

Mike Peterson:

meters. And what's the cost of something like that to bring, I mean, online,

Josue Lopez:

per drill, per production well, it might be around five to $7 million okay, yeah. In our case, we're going to need eight production wells. So, you know, it's a significant cost. It's and not many investors will want to bankroll a four year project that you will literally see nothing but a hole for four years. But then after four years, you have perfect energy, in my opinion, the perfect form of energy. You know, I'm a big nuclear fan as well, but like, the reality with nuclear, and I'm probably gonna get a lot of love shit for this, but the reality with nuclear is that either you go big or you go home. There's no I know about the SMRs and they, you know, the small modular reactors, and 400 megawatts with thorium, or whatever, you know it's so you don't buy that. No, we'll have it in 15 years, maybe 2025 realistically, what we do have now, and we have, we've had since 1933 is geothermal energy. I mean, it's using the the the energy, the heat from from our core, and it's worked really well for El Salvador. And going back to the energy price, currently, one of the most one of the cheapest forms of energy that El Salvador produces is geothermal energy. I would say the only one that beats it might be solar, and only some solar might might generate at a cheaper LCOE. The other thing is that when you build solar, you build it for 25 years. Our oldest geothermal plant has already been operating for 50

Mike Peterson:

years, plus it's 24/7 Yes, 24/7

Josue Lopez:

so I mean, what we want to build is that eventually we'll have an off grid geothermal plant that powers Bitcoin mining farm, okay? And that's the end goal. Yeah, it's still far, far away, but,

Mike Peterson:

but we'll get there. And do you think you can get that cost in that 25 to 35 range that you said it needs to be to Yes, okay,

Josue Lopez:

yes, that's for sure. You know, we'll, we'll obviously have to do it, but, but so far, our estimates show that we will be below that. We will be mining. We're already below that with our renewables, you know, with with solar, with the with what's called the spy, which is a solar specific yield. So the actual, I would say, irradiation that the sun brings to the earth and also, but it's quite good. So per square meter, you generate quite a bit of energy, and as long as your capex can be lowered so that you don't spend more than, say. 600,000 or 700,000 per per megawatt, then you can bring your topics in the mid 30s, including cost of capital, including depreciation, including all those things. And wind is a very similar thing. I mean, as long as you do your studies right, you you target good wind resources, then you can be in that range. Now, if we want to surpass that range, we need to build a geothermal that doesn't cost a billion dollars and and that we develop it quite fast. I mean, three or four years.

Mike Peterson:

So how much of the cost of electricity in El Salvador is, is the generation? How much of it is just an efficient transmission? I've noticed that I believe most of the power companies here are foreignly owned. How much of is them just making excessive profits? Like, what's what's your sense of the electricity market in El Salvador? Well, I'll start by this

Josue Lopez:

transmission is actually really good in El Salvador, and I mean high voltage transmission. Now, high voltage transmission is owned by a by an autonomous government owned company called etesal. So they own all of those ugly, big transmission lines that you see, the high voltage ones, the 115 kilovolt ones, there would be no volcano energy without really good transmission. Because, just because of the nature of the project that we're sort of gathering small resources from various places in the country, we need to centralize those, and we centralize them through the transmission lines. What's terrible, in my opinion, is the distribution network. And those are private those are owned by private companies. I will not mention, but there's only two of them, so it's very easy to know. You just check your bill and,

Mike Peterson:

but, and they're foreign owned,

Josue Lopez:

right? They're foreign owned. And, yeah, which is unfortunate, but then again, I mean, it's not that

Mike Peterson:

I'm against that, but I'm just it was kind of surprising to me to see that there was like, you know, but I don't want the history is there.

Josue Lopez:

I don't like the margin they take, but I also understand why they're allowed to take it back. When no one wanted to invest in El Salvador's infrastructure, they invested in it. So they deserve to, you know, to get a bang for their buck, but in in a very high level, I would say that only half of the cost of energy in El Salvador is generation, and that is because most of the generators I know and we generate energy, by the way, only for the like our fund has invested in energy generation, not for Bitcoin mining, just for the for the selling of energy in PPAs, which are power purchase agreements or or to the spot markets. So I can tell you what we sell our energy at the price is half or less than half of the retail market. So I think

Mike Peterson:

we're paying like 32 cents a kilowatt hour, or something, maybe even more than that now here at the beach,

Josue Lopez:

yeah, well, you just got a new substation, I think the Dominica substation, so that will bring it up a little. You'll get less, you'll get less power outages. But no, I mean the reality is that, say, if energy prices are $220 per megawatt hour, which is 22 cents, by the way, maybe 10 cents is given to the generator, probably one to two cents is given to transmission. The rest of it is either given to the distribution companies or the commercialization companies. There's no other middlemen. So that's where the price goes. It goes to fund the small little cables and the power for for Yeah, that runs through those distribution lines, and those are anything that's above 115 kilovolt is owned by a by a private distribution company. Now, the way that volcano energy, obviously, it's a we want to mine Bitcoin, and want to do it through a geothermal plan, but we also have a social aspect to it, and at no point will we consume 100% of our energy. We will always inject that into the grid. We do know, however, that we will not even you know, we won't do anything to the price of energy. I mean, we are generating more than 200 megawatts, but even if we injected all of it, we will not, probably not change the energy price, at least not in the next three to four years. Yeah. But what we want to prove is that it is feasible, economically feasible, to mine in Bitcoin country, if you're willing to invest and wait a little bit, it is. Feasible to have a fully sovereign Bitcoin mining operation that will last forever, and I mean literally forever, or at least as long as there's volcanoes and and hot stuff under the earth.

Mike Peterson:

Yeah, that brings up another question. Does Does that ever like, do you ever deplete the the heat from a region. Like, Has that ever happened with a geothermal plant? Like it was all dispersed?

Josue Lopez:

Yes, okay, well, we've seen it in the US and Canada Iceland. You know, there's something that that you have to do very careful, which is geothermal well management or geothermal reservoir management. I mean, you need the energy is not infinite, so it comes from somewhere, and if you extract too much of it too quickly, then you can easily sort of dry the well up. But, but in El Salvador, we haven't depleted any geothermal well, any geothermal reservoir, sorry. And in fact, we're generating much more now than we were with the same plant 50 years ago. Yeah. Sorry, I didn't mean

Mike Peterson:

to take you off track, but that was just another question I had.

Josue Lopez:

But the I would say the summary is that we really want to invest in in this form of energy that has been long forgotten by El Salvador. You know, back in the 70s or 80s, El Salvador was known as a pioneer in in the world, it was known as pioneer in geothermal energy. I mean, we, we developed beautiful plants a watch Japan. They're just beautiful plants that supply 23 24% of our energy to this day. I mean, decisions that some people took 50 years ago supply 23% of the energy to this crazy. Just crazy to think about. But when I started through this route, and our team started through this route, and we started talking to people in Iceland and Canada and South Africa about our idea to develop geothermal plant. They said, Why are you talking to me? I mean, you guys have the experts. And I was like, No, there's no one left the geothermal talent that this country had. It disappeared, really? Yeah, we didn't build a geothermal plant since 19 since 1992 at least a big one? Yeah, they will unveil a very small one soon. But you know, one of the big ones we haven't built, El Salvador used to have its own drills. There was a company, another sort of autonomous company, owned by the government, called perfora de la Santa Barbara. Maybe some of your viewers know about it, and they used to own one of the most precious things for any geothermal developer, which is the geothermal drill. I mean, we could drill our own geothermal wells. And I mean, they just rusted away through corruption, really, through and through and through mismanagement. And so it is an energy that is worth bringing back. It is an energy that will solve the what, in my opinion, is the second most crucial issue that El Salvador has ever had. The first one, I mean, we got bukele to fix that quite quickly, which was violent. I mean, the next one, you could argue it's the economy, but there's no economy without energy, and there's definitely no cheap energy in El Salvador. So

Mike Peterson:

we know, and I think if El Salvador had, they didn't have to be the cheapest. But if, if energy price was just average, I think a lot of businesses would would locate here, because there's advantages. You have a great workforce, you have a government that's very good to work with. You have, you know, decent shipping. You have a lot of things going for it, but the energy thing is really holding us back, I feel like.

Josue Lopez:

And I mean, there's also a very expensive premium that companies have to pay for for the reduction of jurisdictional risk or stability, yeah. I mean, the stability of El Salvador for I don't know, AI companies to come and build their data centers. I mean, you know that things in El Salvador changed in 2019 and they're never going back. I mean, El Salvador is never going to be the old. El Salvador ever again, because of the switch has changed in Salvadoran people, the culture is different. The first thing that you Well, one of the first thing that you asked me is, when I came back to El Salvador, did I feel weird? And I mean, yes, and now I would feel weird to go back to that old El Salvador. It's a different country, you know, and the people in El Salvador are different. So El Salvador is never changing. And,

Mike Peterson:

well, I noticed this last year we went to Medellin for Bitcoin Conference. And I've never been one to shy away from, you know, Dangerous play. I mean, moved to El Salvador when I had the highest murder rate in the world. I've never safety has never been pop on my list, but I felt it for the. First time, and I didn't realize how used to feeling safe I had gotten all of a sudden, I realized I can't just pull my phone out, like somebody's gonna snatch it, and it's, it was this weird feeling to be like, Oh, I'd like to get back to El Salvador, where I feel safe.

Josue Lopez:

No, for sure. I mean, I'm going to South America next week, and, well, we have some operations in South America, so I always have to go, and I always get reminder by the Uber drivers, like, listen, be careful. Don't, don't pull your phone out when it's too late at night and stuff like that. And you know, it feels like I'm in a different universe. El Salvador is, I think it's very hard to understand, for people that haven't been here, to realize just how safe it is. It's, it's incredible, safer than Switzerland. And, I mean, I lived in Switzerland, so, so it, it was hard to believe when I saw that. I thought it was like, but then, I mean, I saw the numbers, and it makes sense, yeah, and you feel it, so obviously, you know, I would say the El Salvador needs, needs a lot of more things. Thankfully, we have amazing builders that are building it, people that are taking massive undertakings, even harder challenges than the ones me and my team are taking with volcano energy or with our other projects. So I'm confident that in if El Salvador is a different country now, it will be a different country in 10 years, and hopefully in 10 years or Well, hopefully even less than that, we'll have cheaper energy for you and and your podcast, and you won't need solar panels on your rear view. Just get cheaper energy.

Mike Peterson:

Yeah, so what would you say to other funds out there that are maybe thinking about El Salvador, or businesses that are are looking at as El Salvador as a place to move operations. You know, how would you encourage them? Or how would you tell them, hey, still be realistic. We're still early in this. What would be your advice?

Josue Lopez:

Well, my realistic advice is, you know, do it. It's if your vision is aligned with Salvadoran vision, then do it.

Unknown:

Because when,

Josue Lopez:

when the country matches what they what these funds or investors or companies want it to be it will come at a huge premium, at a very huge expense. I mean, real estate right now, it's quite expensive, but it'll be much more expensive in five to 10 years from now, when the when we have built the country that we want to live in. So, I

Unknown:

mean, I'm seeing

Josue Lopez:

part of my job is meeting with investors and companies that want to move here and helping them sort of navigate this, the banking space and the investment space and the tokenization space, the legal stuff, all that, and the it's growing exponentially. I mean, the time I have to give to these sort of meetings where I'm just meeting people that are coming here is growing rapidly. And that is the same experience I've had talking with with a lot of lawyers that focus on sort of international companies coming here. They tell me, like, listen, two years ago, it was maybe 10% of my my week was meeting these people. Now it's 90 and they're everyone's just moving here, and eventually it will be too late. I mean, I still think El Salvador is early. Bitcoin is definitely early. So, you know, do it now, because after that, you'll just, yeah, you'll be left behind.

Mike Peterson:

And do you do you see like a long term future for you guys in the mining industry here. Or do you think that it's mining is going to get to a point where it's challenging to do profitably? Or what's your man, I know it's started getting there for a lot. You look at the miners, just the price of their stocks, and they're struggling. So I'm just curious as to what your outlook is for miners,

Josue Lopez:

miner mining, or at least Bitcoin mining, is a race to 0% margin, and that's fine, you know, there's still a long time for that to happen, but, but I don't think the Mining sort of Gold Rush is over yet. I think we still need to grow the strength of the Bitcoin network. We still need to find new players that will not be bound by sort of only financial incentives. So, you know, if I, if I develop, and we're joking with one of our investors a while back. I mean, we're gonna develop an off grid geothermal plant that can only supply energy to a mining firm. What if bitcoin becomes unprofitable? And so he told me, you know, for us, it'll never be unprofitable, because it's more profitable to use the energy mining Bitcoin than just not. Use the energy, you know. So eventually I think that will happen. Sort of perpetual mining companies. I saw one the other day. They raised, I don't know, 60 million or 70 million. And it's a solar sort of satellite that mines Bitcoin. It is just tracks the sun so that it always has energy. I'm sure we'll see some nuclear sites that will always run. There's not a thing like too much energy, but definitely a balance will be reached, as in everything. I mean, eventually, like right now, we could say we're in the AI data center Gold Rush, but eventually, you know, margins will be squeezed. There will be more competition. And what happened in 2022 that everyone just started mining will happen again. You know, we we care about the infrastructure behind it, not really the short term profit of mining and making a buck right now.

Mike Peterson:

You'd mentioned offline before we started about a housing initiative. I don't know if you wanted to talk a little bit more about what, what your guys involvement is with, with that, yeah, for sure.

Josue Lopez:

I don't want people to think that, that all I do is energy. I I would say we're really committed. Obviously, me as a Salvadoran, but also our group of investors and and our entire fund and our team is committed in solving whatever we can solve for El Salvador, and one of those things are well as you probably experienced. I mean, housing prices are through the roof,

Mike Peterson:

especially like middle class or lower middle class. Like housing options,

Josue Lopez:

we ran an analysis, and we saw that the best path forward for our fund is to give loans to people that like extreme, crazy, expensive loans to low income people so that they can buy interest housing that was sort of the what, the numbers they can buy, what so that they can buy low income housing or social interest housing. So that was what the numbers and the analysts told us. Like, listen, this is where you guys can make them the most return.

Mike Peterson:

Because these these projects are selling below market rate, it makes sense for them that borrow at high interest. Or what is the reason? I

Josue Lopez:

mean, because you get the collateral, say, a house at $45,000 that you know that next year is going to be 50,000 or 55,000 and if the people don't pay for the loan, you can just take the house and sell it again in the market and finance it again. So

Mike Peterson:

and are the laws pretty like workable as far as that that goes for.

Josue Lopez:

I mean, there's a free market regarding social income housing. There is some limits regarding the funding that people can I mean

Mike Peterson:

more as far as the process, if you do have to repossess a house or the law is pretty straightforward, is yeah,

Josue Lopez:

pretty straightforward, as with any loan. But what I'm getting at is that the number showed us that that was the most sort of Yeah, the path we should go if we wanted to maximize profits. And so we decided that's exactly what we meant to disrupt. So the the low income housing market. And

Mike Peterson:

so you guys are specifically doing loans to people. You're not building housing.

Josue Lopez:

We're we're not doing loans. We're building. Oh, you are building. Okay. I mean, that's what, what the analyst said

Unknown:

that told you that, but you guys okay? But we, we said, I mean,

Josue Lopez:

you know, the the real estate market is artificially propped up currently. I'm not saying it's going to blow up. It's probably going to last a long time, yeah, maybe long enough for it to even matter if it blows up, but, but the truth is that people that make minimum wage. You know, a mom and dad, they cannot afford a social interest home, which is the cheapest sort of minimum standard of living that people in El Salvador have to have. Now you can see sort of lower levels of quality of those homes. I mean, you've seen the little huts with with sort of metal roofs and so on, but, but you've also felt the earthquakes in El Salvador, so one of those, and those houses are gone. They're not safe for people who live. So we decided we wanted to build low income housing. We want to compete with the local companies that are currently supplying the market with these low income housing I think they lack competition, and therefore their product lacks quality, and it has. The price has been going up and up, but the you know, the quality has never increased. So yeah, we decided to start with our 500 House Project. It's our pilot project. We ran one before of that, of 92 houses we built it quite, quite good we

Mike Peterson:

and I'm just curious, so what, what was the like? What is the price point that those houses sell at, and are you actually able to sell them at a profit, or do you take a loss on them? Or what was the

Josue Lopez:

No, you sell them at a profit. And. You I mean, the cheapest you can buy a house is $45,000 you know, our house is 51 square meters, so it's below the $1,000 per square meter mark. But then, you know, our the competition, or the housing market, the low income housing market in El Salvador sells, you know, at the square meter at 1400 1500 and it's crazy. I mean, it's completely unattainable for the people that are making the minimum wage. And in reality, it's the, you know, the backbone of the economy are all these people, 70% of the people in El Salvador that you know, make minimum wage that are unbanked. I mean, Bitcoin gave them a path to financial inclusion. But who, who cares about Bitcoin when you can't live, yeah, when you know if it rains, you you know your metal roof sort of leaks water, or if there's an earthquake. I mean, you know, the first thing you're gonna think about is protecting your kids or anything. You're not gonna think about your cold wallet or something like that. So the reality is that financial inclusion requires peace and stability. First of all, now violence is gone, but we need to give an adequate living standard. So

Mike Peterson:

what's the minimum? Like income a family would need to make to buy one of those homes

Josue Lopez:

around 900 900 Okay, between mom and dad, yeah, so that's two, two minimum

Mike Peterson:

wage. Two minimum wage. Yeah, the idea

Josue Lopez:

is that eventually you know that that is the point of it all, mom and dad that makes minimum wage cannot afford any home in El Salvador, they have to build their own sort of go to to the go find some scrap metal and some wooden post and build their home. So we want to start growing our proof of concept. We're launching, well, we already launched. We're building 500 homes. After that, will reevaluate. We'll see what we can make more efficient, because that's what we're trying to do. We're trying to make things more efficient, and after that, build 1000 homes, or 2000 homes, and eventually grow from that. The the housing deficit in El Salvador is massive. Hundreds of 1000s of homes are missing of these sort of homes, yeah, you know, low interest homes, sorry, low income homes, yeah. And so that is a really big focus point for the next couple of years. I mean, energy, we will continue to develop it. Eventually we'll probably be able to supply our energy directly to these homes, so that we can cut off 50% of the surcharge that we were discussing from the distribution companies. But it is, it is the way El Salvador going is going, and I think it's a really good way, especially consider what, considering what other builders are doing. And I talk to them all the time. I mean, we, most of the people that are here currently building. They, you never see them on Twitter, sort of complaining about something that is not perfect, or not us like or whatever they're actually building. And I admire all of them. So I think anyone that wants to come to El Salvador just, you know, they, they need to realize that El Salvador is not the place they want to be. I mean, they, that's what building means. I mean, they have to be uncomfortable for a while, but then they'll lead, you know, they'll lead the change. I

Mike Peterson:

think that's a good, good note to finish on. Is there anything else we didn't cover that's pretty much it? No, I appreciate you coming on and educating me on the mining and the energy stuff, because that's something that's always kind of perplexed me. And yeah, and I have people ask me all the time, and I'm like, I don't understand that. It doesn't make any sense to me, but, but now I feel like a

Josue Lopez:

little bit the usual thing I got, like, how can I mine in in El Salvador? And the short answer is, you can. Yeah, yeah. You can, unless you invest hundreds, yeah, yeah. And wait a couple of years, yeah. And then you'll have

Mike Peterson:

energy that makes sense, awesome. Well, we'll have to have you back on in, you know, six months or a year, and get his update on how some of these

Josue Lopez:

things are going. Now we can, we can ship the studio to one of our sites and do a site visit, perfect. Yeah.

Mike Peterson:

I like it. All right. I like it. Paco likes when I make him move all the cameras and everything somewhere. So,

Josue Lopez:

yeah, six months, we'll do one. All right, sounds good. All right. Thank you, Mike. You.