El Salvador Bitcoin city is planned at the base of Conchagua volcano

Image source, Reuters
Image caption

The plans were announced by President Nayib Bukele to an enthusiastic crowd

El Salvador has revealed that its president plans to construct a Bitcoin-based city at the volcano’s base.

The city will be circular to represent the shape of a large coin and will be built in the south-eastern region of La Unión, President Nayib Bukele said.

He said that the site would use Conchagua’s geothermal power to run Bitcoin mining.

El Salvador became the first country in recent history to adopt Bitcoin as a legal tender.

Large-scale protests erupted over the fears that cryptocurrency might bring in inflation and instability to poor Latin American countries.

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Mizata’s late Saturday evening event was attended by a large crowd. Mr. Bukele stated that his new city would include everything.

The 40-year old said, “Residential and commercial areas, services. Museums, entertainment. Bars, restaurants. Airport, port. Rail – all devoted to Bitcoin.”

On stage, the president wore his baseball cap backwards. He stated that no income taxes will be assessed in the area, but only value-added tax (VAT).

He stated that the half-million dollars would go towards “building up the city”, and the remainder would be used in order to maintain the street’s cleanliness.

The sophisticated computer technology used to solve complicated mathematical problems is what it takes to mine Bitcoins and other cryptocurrency. It’s expensive and difficult, as well as consuming a large amount of energy.

While Mr Bukele could not give dates or details about the completion of construction, he stated that the cost of much of the infrastructure public would be around 300,000. Bitcoins.

One Bitcoin is currently trading at just under $60,000 (£45,000).

El Salvador, along with the US dollars, introduced the virtual currency in September.

At the time, the government released a new digital wallet app, giving away $30 (£22) in Bitcoin to every citizen. More than 200 additional cash machines were installed throughout the country.

The measure was presented by El Salvador as an opportunity to increase economic development and job creation. However, El Salvador is now divided.

Businesses are now required to accept digital currency payments wherever possible.

Bitcoin, which is controversial due to its volatility in value over time, has seen dramatic rises and falls during the last year.

Source: BBC.com

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