I didn’t know if you noticed but the El Salvador Bitcoin project is still chugging at an unprecedented pace. From the adoption of the Bitcoin Law through Chivo wallet and to El Salvador’s Bitcoin City it has been a ride. So, how is it shaping up? Why build a Bitcoin City in the first place? The answer to all these questions and more lies down below. Are you ready? Let’s go!
What Is Bitcoin City?
Then again maybe we should start by explaining the following: what the heck is a Bitcoin City?
20th of November 2021, the president of El Salvador Nayib Bukele walked on stage at a gathering of Bitcoin enthusiasts. There he reportedly said the following: Let there be Bitcoin City (2022). And from that moment the plan was set in action.
The El Salvador government will be issuing $1 billion in tokenized bonds. Half of that will go to building of the city and the other half will go to purchasing more Bitcoin. Fun fact, when looking from an aerial point of view the city will resemble the Bitcoin logo.
Now, that’s commitment. And for the libertarians among you, I have the following words that might pique your interests. Zero payroll tax and zero income tax! Plus both property tax and capital gain tax are zero! And to finish it all add a barely legal 10% VAT and you got a tax haven in the making! This is all in the incentive to drive investment to the country which is sorely in need of it. If all of this sounds appealing, you can just invest 3 BTC in El Salvador and bam you’re a citizen!
But, let’s take a ground-level look at the crypto integration in El Salvador’s economy before you pack your bags.
El Salvador Crypto
Before we get to Bitcoin integrates let’s take a look at what troubles drew El Salvador to cryptos in the first place. In 2015 there were 6670 recorded murders in El Salvador. That means there were 105 murders on every 100000 people. With a population of 6.486 million that’s above average to put lightly. But those aren’t even the main problem.
A lot of people are (like in a lot of central American countries) emigrating. Most of these people send cash back to their families back home and this is where cryptos jump into the story. A speedier and less costly way of depositing money to families e-wallets back home is major boost in these uncertain times. With the aptly named Bitcoin law passed on 8 June 2021, El Salvador became the first country that accepts Bitcoin as legal tender. This means that businesses are incentivized to accept BTC as currency for purchasing goods and services. There have been quite a few problems reported with the app so people should still be cautious.
Now, El Salvador is very dependent on the USD being that its original currency Colón went kaput. Over 70% of the population isn’t integrated into the banking system, a fact that crypto proponents want to capitalize on. How? By giving them E-wallets. E-wallets? Let’s take a look below.
Can You Use Bitcoin in El Salvador?
The state issued wallet in El Salvador is called Chivo. Or rather that’s the name of an app that the government issues to all of its willing citizens. One of the first benefits was a 20 cents per gallon discount on gas for those who pay with the app. Chivo is also slang for “cool” so that’s cool, I guess. The app isn’t a true crypto wallet, in that it isn’t decentralized, but connected to The Lighting Network controlled by the government.
This might be a deal breaker to some, but the government is dropping $30 (In BTC) in their wallets which is quite chivo of them. The government hopes this will nudge the people into spending even more than the $30 deposited in the app. Wait a minute, $30?! That’s three times the minimum amount you can deposit at our casino.
Now, we already mentioned that over 70% of people aren’t integrated in the banking system and don’t have access to online commerce of any kind. To capitalize and mitigate this fact by promoting digital literacy programs which center around the Chivo app specifically. This is all well and good but I think I missed something?
Bitcoin Mining Rigs in El Salvador
O, yeah. That something that I forgot is the fact that the Bitcoin City’s being built right next to a volcano! Conchagua volcano isn’t an active volcano, mind you, so that’s the first plus but here’s another. Remember those 500 million dollars going to building the Bitcoin City? Well, a lot of that will be invested into Bitcoin mining which will be powered by the volcanoes geothermal energy. So, zero emissions can be added to those tax Zeros.
You know what also almost equals zero? The waiting times with our instant withdrawal method. Add to that the almost zero equaling Litecoin transactions fees and you got a complete package. Don’t believe us? Well, you just read the Trust Pilot review and decide for yourself.
