El Salvador has taken the unprecedented step of building a city solely devoted to bitcoin mining and also funded by bitcoin.
El Salvador has taken the unprecedented step of announcing the creation of a city solely devoted to bitcoin mining and also funded by bitcoin.
Not only that, but the city will be built at the base of a volcano so that its geothermal energy can power bitcoin mining.
President Nayib Bukele is a huge supporter of the blockchain, having made bitcoin legal tender in his country two months ago.
Speaking at the Latin Bitcoin Conference Mizata Beach, El Salvador, on Friday, while wearing all white and a backwards baseball cap, the president revealed that citizens in his new city won’t be taxed.
He will use 300,000 bitcoin bonds, worth around A$24 billion at time of writing, to pay for the city.
President Bukele said the city would be circular in shape as an homage to the shape of a coin, and will also feature a central plaza which would look like a bitcoin symbol from the air.
“Invest here and make all the money you want,” he said. “Residential areas, commercial areas, services, museums, entertainment, bars, restaurants, airport, port, rail – everything devoted to bitcoin.”
The city will be located at the southeastern region of La Unión.
Residents wouldn’t need to pay any tax except GST, which would go towards the maintenance of the city such as bin collection.
President Bukele compared his plans for the new city to that of Alexander the Great founding cities within his empire.
“If you want Bitcoin to spread over the world, we should build some Alexandrias,” said Bukele.
People can start buying the bonds to fund the city as early as 2022, which is less than 50 days away.
The nation haven’t set a date for when construction is expected to start or finish.
It comes as the energy needed to mine bitcoin surpassed 91 terawatt-hours of electricity annually – more electricity than is used in a small country such as Finland.
Bitcoin is currently worth US$59,000, down from its all-time high earlier this month of $68,500.
President Bukele first threw his weight behind the speculative digital currency in September.
El Salvador can now legally use bitcoin, along with the US dollar which has been the official currency for two decades, to pay for any good or service.
The president kickstarted the initiative by buying 400 bitcoins.
Bukele gave $30 for each citizen who adopted the currency in a bid to promote it.
The bill was approved within 24 hours of being presented to El Salvador’s Congress – the president Bukele’s allies have held a majority since March.
It caused widespread protests and fears that it would destabilise their economy.