Volcano-Powered Bitcoin City Proposed for El Salvador

Treehugger has often complained about Bitcoin and crypto because of its vast electricity consumption and has even gone so far as to suggest that it be banned. (Don't read the comments!) However, there is a proposal from El Salvadoran President Nayib Bukele to build the world's first "Bitcoin City"—it will be very green with the city and the Bitcoin mining all powered by the geothermal heat of a volcano.

While residents of Pompeii and Herculaneum were not available for comment, building a city in the shadow of the live Conchagua volcano makes a lot of sense if you can harvest the energy and turn it into electricity. The government plans to issue a $1 billion "volcano bond" to raise money, half of which will be invested in Bitcoin and half of which will be used to build out the city. According to Reuters, Bukele invited people, stating: “Invest here and make all the money you want. This is a fully ecological city that works and is energized by a volcano.”

It is a very interesting city, designed by Mexican architect Fernando Romero to be totally sustainable. Romero writes on Facebook:

"This new city will mark the new moment of our civilisation. It will be a new urban planning with an environmental conscience due to Bitcoin City generating its’ own energy from the volcano located at the perimeter. This will show a new humanitarian city plan."

It's designed to be a walkable city with large landscaped avenues, streetcars, bicycle expressways, and a light rail network.

Romero writes:

"The city has been designed to be built in stages. As a decentralized system, investment can be regulated according to growth needs. The city will have a large central plaza with a museum that will become a world attraction, showing exhibitions about the history of money. There will also be intelligent buildings with the latest technologies, as well as a large, multipurpose arena that will show events of all kinds, and become the epicenter for concerts in the region. "

The economic model is different from most cities, being based on Bitcoin. According to Romero:

"In Bitcoin City, companies linked to the mining of cryptocurrency will be welcomed, as well as technology companies that will come to invest due to their interest in becoming part of this innovative, smart-city model. A number of incentives for investors will make this city a reference on how to make a city both efficient and sustainable at the same time."

According to Fortune Magazine, the city will be free of income, property, and capital gains taxes. The only tax in Bitcoin city will be a 10% Value Added Tax (like Canada's HST or the VAT in the United Kingdom) to fund city services.

"The citizen is the central focus in the design of Bitcoin City. Their mobility will be clean and their way of working comfortable. The new public space will be the culmination of decades of research on what humans need to live well in an anti-inflationary economy."

There are many who question the value of cryptocurrencies, and who also question whether Bitcoin types can build a city. Economist Ryan Avent notes in his blog:

"Proposals to build ideal communities based on clever blockchain systems are presented using the language of inclusion and democracy. But to think that we understand how society works well enough to have the confidence to hard-code complex incentive structures into the most fundamental political and economic institutions we have betrays what one might label a fatal conceit."

The plan of the city is incredibly detailed and well-resolved—a lot of work went into doing this. I wondered about this and asked a friend who used to work for Romero, who tells Treehugger that "this project has been in his portfolio for over 15 years or so, and it is his version of Foster’s Masdar City." For context, Masdar is an eco-city in Abu Dhabi designed by Foster and Partners that was never completed as planned, and Romero proposed this city for Central America, long before Bitcoin and the volcano took a bite out of it.

Treehugger loves recycling, so it's great that it is finally being put to use. Although, the friend tells Treehugger: "This project seems to me utopic and not thoroughly thought out. It never seemed to me that it could deliver what he promises, especially in terms of mobility and sustainability."

Speaking of recycling, it also bears some resemblance to The Garden City concept laid out by Ebenezer Howard in 1902, which was going to house 32,000 people on 9,000 acres. It had a concentric form with radial boulevards, but no volcano. Howard also designed his city around money and finance, according to Daniel Nairn in Smart Cities Dive most of his book, "The Garden City of the Future":

"...can be read as a business model being pitched to potential investors. He assures interested parties that he can get them a 4.5% return. Howard makes it clear that he is not a socialist, and he does not see centralized government playing an initial role. The closest thing I can relate his plan to is a homeowners' association on steroids, he calls it a "quasi-public body," which owns all the land of the city and leases it out to residents. The financial linchpin of the plan is the fact that all of the land is purchased up front, so that the increase in property values generated by the growth will be captured by the community itself."

That's not quite as good as the Bitcoin Volcano Bonds, which pay 6.5%.

The project also reminds us of the work of Alice Constance Austin, known to Treehugger for her houses without kitchens, that were to be built in her socialist utopian city in California, describing it:

“The Socialist City should be beautiful, of course; it should be constructed on a definite plan . . . thus illustrating in a concrete way the solidarity of the community; it should emphasize the fundamental principle of equal opportunity for all; and it should be the last word in the application of scientific discovery to everyday life, putting every labor saving device at the service of every citizen.”

While Bitcoin City leans a bit more libertarian than socialist, it clearly is one of a long line of utopian visions of reinvented cities. Romero says it will be efficient and sustainable. Samson Mow of Blockstream says in Fortune that it will be “the financial center of the world” and “the Singapore of Latin America,” because Bitcoin will hit a million dollars in five years and everyone who invests in this will be very rich. Sounds like a sure bet—urbanistically and financially.