In 2021, El Salvador became the first nation in the world to accept bitcoin as legal tender. Countless citizens protested the move, crypto investors celebrated it, and the rest of the world watched with interest, eager to see what happened next.
One of the first major moves was to announce the construction of a “Bitcoin City”. Another world’s first, this city is set to be constructed next to a volcano and will include an array of services, all of which will be funded by the popular cryptocurrency.
There are some big plans for this crypto metropolis, and they could have a knock-on effect for the entire industry, including bitcoin casinos and exchanges. But what will this city look like?
What is the Bitcoin City? Here’s what we think it’ll look!
“Bitcoin City” will be built at the base of a volcano in the region of La Union, located in south-eastern El Salvador. The plans call for a circular city, resembling a large coin, and it will be funded by bitcoin.
The first brick hasn’t been laid just yet, but there are big plans, including the development of:
- Commercial and residential areas
- Entertainment facilities
- Bars and restaurants
- A bitcoin casino
- An airport
- A port
- A railway
To encourage people to move into the city and invest in its property and businesses, there will be no income taxes, and the only tax levied on the citizens will be value-added tax (VAT).
Why a Volcano?
A volcano might sound like the dream base location for a Bond villain, but there is a method to the apparent madness. It is hoped that the volcano will power the city and its bitcoin mining operations using geothermal energy.
It’s not a radical invention or idea, either. El Salvador already uses a lot of geothermal energy and this energy is also used in other countries with a great deal of volcanic activity.
How Will the Bitcoin City Help?
There are many ways that a bitcoin city could help the nation of El Salvador.
Firstly, bitcoin mining will be the foundation of the city, and so it will essentially serve as the nation’s mint and will keep those bitcoins flowing. Secondly, it provides opportunities for those bitcoins to be spent, including an array of service- and product-based industries that are geared toward accepting cryptocurrency payments from day 1.
Bitcoin city should also encourage crypto investors and businesses into the country. Everyone from bitcoin casino operators to miners, investors, and retailers could look to El Salvador as a crypto paradise of sorts, bringing more opportunities and more cash into this struggling country.
Finally, and perhaps most importantly, it will create a lot of jobs for the country’s skilled and unskilled workers.
Those new businesses need employees, as do the sectors that blossom as a result of the city’s construction. Even the initial investment will be a massive boost to the country, as a lot of work needs to be done to get this project off the ground.
What Are the Consequences?
Although there are clearly a lot of positives to “Bitcoin City”, there are also some negatives.
Bitcoin is a volatile currency, and it can fluctuate considerably. If El Salvador invests heavily and puts all of its eggs into one basket, it will suffer immensely if the price of bitcoin plummets.
At the same time, of course, El Salvador could be one of the richest countries in Central America if the price continues to climb.
What Does the Future Hold for Bitcoin City?
Bitcoin City is a long way from being fully realized and as there have been no official plans or dates, it’s hard to know for sure what it will look like.
However, if construction goes ahead and the dreams of the country’s ambitious President are realized, Bitcoin City could be the first of many. It could become a high-tech, decentralized city that runs entirely on bitcoins mined from a sustainable energy source. It will supply many El Salvadorans with work and opportunity, and if it succeeds, it will likely expand and then spread to other parts of the country.
The best-case scenario is that El Salvador becomes something amazing and literally changes the world. The worst-case scenario is that it becomes an unfinished money pit that sinks the country’s economy.
As for the reality, it will probably be somewhere in the middle. Only time will tell, but it’s certainly something that we should be keeping an eye on as it could change the global economy forever.
Summary: El Salvador’s Bitcoin City
It remains to be seen what El Salvador’s “Bitcoin City” will look like or how it will function, but if the country’s goals are achieved, it should be an impressive sight. It’s also one that could provide a big boost for the cryptocurrency industry, so make sure you keep your eyes focused on El Salvador and its promising new city.