GADGETS

El Salvador will build a ‘Bitcoin City’ powered by a volcano


The President of El Salvador, Nayib Bukele, gesticulated during his speech at the closing ceremony of the Latin Bitcoin Conference on Mizata Beach on November 20, 2021.

The President of El Salvador, Nayib Bukele, gesticulated during his speech at the closing ceremony of the Latin Bitcoin Conference on Mizata Beach on November 20, 2021.
Photography: Marvin Recinos / AFP (Getty Images)

Salvador’s 40-year-old right-wing president, Nayib Bukele, is once again betting on bitcoin to move the country forward. His dubious plan is, in essence, to build a “Bitcoin City” powered by geothermal energy from a volcano to help raise the profile of the cryptocurrency and encourage its widespread use.

Bukele said that on Saturday the so-called Bitcoin City in the country will be built in La Union, a region in the eastern part of El Salvador. Reuters reports that the city will not charge any taxes other than value added tax or VAT and have a central square that will look like a symbol of bitcoin from above. In addition, Bitcoin City will be circular and will include an airport as well as residential and business premises.

This will, of course, be a place for bitcoin mining, ie energy intensive task this will be made possible by the volcano Conchagua, the government of El Salvador said Media Release. Conchagua consists of two overlapping stratovolcanoes and overlooks Fonseca Bay.

Bukele revealed his plans for Bitcoin City in a statement at one event after a week of bitcoin promotion in El Salvador, which became first country to recognize bitcoin as the national currency in September.

“Invest here and make all the money you want,” Bukele said. “This is a completely ecological city that works and is energized by a volcano.”

Experts explained that at the event the country would issue $ 1 billion in “bitcoin bonds” in 2022 to raise funds to build Bitcoin City. The bonds will be issued on the liquid network, the bitcoin side chain network and will carry a nominal yield of 6.5%.

Blockstream, which manages the liquid network, said the funds raised would be $ 500 million dedicated to infrastructure for the city and bitcoin mining in the region. The remaining $ 500 million will be used to buy more bitcoin.

It’s hard to imagine that the citizens of El Salvador, one of Latin America’s poorest countries, will be as excited about Bitcoin City as Bukele or its bitcoin group. Digital The introduction of the currency was accompanied by problems, which incited protests against the government, and surveys found to citizens are wary of the president’s passion for bitcoin.

After all, the citizens of El Salvador would certainly see more benefits if their president focused more on changing and improving lives instead of fixing on extremely volatile digital currency. The odds don’t look good though.



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Naveen Kumar

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