Conchagua volcano: 90% chance of powering El Salvador’s Bitcoin City
The volcano can provide enough energy to power the entire Bitcoin City
President Nayib Bukele of El Salvador has said there is a 90% chance of using the Conchagua volcano to power the entire Bitcoin City, which was announced in November 2021.
The geothermal energy from the volcano will be used to fuel the city. The president of El Salvador describes the volcano as “inactive” as there is no history of confirmed historical eruptions from the Conchagua volcano.
Bukele said that the volcano can supply at least 42 megawatts (MW) of energy which is “enough to power all of Bitcoin City”.
The Conchagua volcano is in the southeastern part of El Salvador and overlooks the Gulf of Fonseca.
The El Salvador president also said that the state-owned electric company LaGeo will continue to increase its production of geothermal power from different volcanoes in the country. According to the Global Volcanism Program, El Salvador has 20 volcanoes.
Tax-free Bitcoin City
The city will consist of residential and commercial areas, restaurants, an airport, port and rail service, and will be laid out in a circle, like a coin. The city centre will have a plaza with a bitcoin symbol in it, and residents will have to pay no income, property, capital or payroll taxes.
Instead, Bitcoin City residents will be subject only to value-added tax (VAT), which Bukele stated will be used to pay the municipality’s bonds, and the rest for public infrastructure and city maintenance.
At the time of the announcement of Bitcoin City, Crypto investor Anthony ‘Pomp‘ Pompliano and supporter of Bukele tweeted the advantages of living in the crypto metropolis.
The city will be funded by bitcoin bonds on the Liquid Network. The Liquid Network and blockchain technology company Blockstream have been in talks with El Salvador, discussing bitcoin bonds, to support the nation’s initiative of making the lead crypto legal tender.
The Liquid Network explained that the bonds “will be split between a $500m [£368m] allocation of bitcoin and a $500m infrastructure spend for building out energy and bitcoin mining infrastructure in the region”.
The network also detailed how El Salvador aims to create a “securities law and grant a licence to Bitfinex Securities to process the bond issuance”.
Bitfinex gets involved
Paolo Ardoino, chief technology officer at Bitfinex, a cryptocurrency exchange operated by Finex, tweeted to explain the company’s role in the El Salvador announcement.
Ardoino said: “Finex will launch a securities platform that will be the home of El Salvador bitcoin bonds and soon many local and foreign digital assets offerings, developing new digital asset regulations for the country.”
El Salvador made history by becoming the first nation to accept bitcoin as legal tender on 7 September in 2021.