El Salvador’s plans to build a Bitcoin City and what it entails
The second half of 2021 has been eventful for El Salvador since President Nayib Bukele announced their plans to accept Bitcoin as legal tender. They planned to continue their momentum in supporting it by establishing a Bitcoin city. The announcement was made in November 2021 with plans to begin construction sometime in 2022.
The Bitcoin city is planned to be built along the Gulf of Fonseca which is composed of a group of volcanic islands. El Salvador aims to raise $1 billion-worth through Bitcoin bonds to fund its construction. Half is dedicated to buying Bitcoins to serve as seeding money for establishments in the city. The other half is for mining infrastructure.
El Salvador has shared a few plans for the city’s construction. The most enticing of which is that there will be 0% tax on payroll, income, capital gains, and property. There will be a 13% value-added tax (VAT) for all purchases within the city. 6.5% of which go to issue bonds for building the city and the rest are for public services or other urban needs.
They did not share any plans for a Bitcoin casino in the city at the moment. Gambling is legalized and regulated in El Salvador so it’s likely to have a casino in some way.
The Bitcoin City’s location is planned because of ‘volcanic mining’, another advancement in the country. They plan to use the closest volcano to be the city’s main source of power for mining Bitcoin. President Bukele proudly announced on Twitter that they successfully mined a fraction of Bitcoin on October 1, 2021. They only started trying a day before but the 0.00599179 BTC that they got then was impressive as it was worth $270 at the time.
The Republic of El Salvador is currently leading the study for running a Bitcoin-centric economy. They are the first and only country in the world to accept Bitcoin as legal tender and no other countries have announced plans to follow. El Salvador also leads the research for volcano-powered Bitcoin mining plants. They have a large advantage thanks to being surrounded by volcanic islands. Bitcoin City is a culmination and extension of both efforts.
The Bitcoin City project has two goals: to create a physical trading hub for Bitcoin users and push the volcanic Bitcoin mining project. The latter is a great prospect for miners’ search for green mining that investors demanded in May 2021.
El Salvador also plans to focus on digital education in Bitcoin city which secures the next generation to be more literate in blockchain technology. Crypto prices are bound to skyrocket during the city’s construction. Hodling and Bitcoin casino winnings are bound to be extremely profitable in 2022 and beyond.
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