Cryptocurrencies - The future of money? | DW Documentary

It's somebody's freedom. It's somebody's liberty. It's somebody's silent protest.

It has been hijacked in large part by opportunists, con artists right? Scammers. Bitcoin can be money the way gold is.

But that doesnít mean Bitcoin is a currency. Society is worse off in every regard if we have a new speculative Bitcoin bubble than it would be if the whole craze passed. On the North Pacific in Central America lies the small town of El Zonte, El Salvador.

The waves draw surfers from around the world. But these picture-perfect moments only capture one reality. Home to 3,000 residents, El Zonte is one of the poorest places in the country.

But its street food is famous. The national dish is called ìpupusa. î Theyíre sold on nearly every street corner for just a couple US dollars.

Maria Aguirre accepts virtual money as payment. Via a smartphone app, customers can pay with Bitcoin, the worldís oldest cryptocurrency. I was a little worried to accept payment in Bitcoin because itís a virtual currency thatís not widely known.

But itís been two years, and Iím still taking Bitcoin. At first, the decision paid off for Maria Aguirre. The value of Bitcoin shot up to 60,000 dollars.

But then, within just a few months, it lost more than two-thirds of its worth. Now Maria and some 50 fellow retailers can only hope the trend reverses. Bitcoin can theoretically be exchanged for dollars or euros at any time.

In fact, holding onto this virtual currency rather than exchanging it can be a significant gamble. Because the crypto market is highly volatile. Short-term fluctuations happen frequently where its value will dip or surge more than 10 percent.

Itís a risk some retailers in El Zonte are willing to take. They pay and do business in Bitcoin, but they donít exchange their crypto assets into dollars hoping that its value will rise. Maria Aguirre is one of them.

But at the end of 2022, things werenít looking so good. Iíve had losses, but I hope to recover them soon. Since then, the value of Bitcoin did rise again.

Welcome news for not only Maria. A social Bitcoin project in El Zonte is financed through crypto donations. The project is geared towards preventing young people from turning to crime.

Gangs and murder are a feared part of everyday life in El Zonte. ìHope Houseî gives young people in the community the resources to get a better start in life. The charitable initiative offers educational courses, recreational activities, and job opportunities.

In 2017 and 2018, many people had to suspend their support for this project due to various difficulties. But at the same time, there were newcomers who wanted to help. And they used Bitcoin.

The identity of the donor who offered funding to Jorge Valenzuela remains a big mystery. All thatís known is that the person was based in the US. Even the initiator of the nonprofit, ìBitcoin Beach,î in El Salvador says he doesnít know who was behind the donation.

I mean it was a six-figure sum over a number of years that was injected into the community in dollar terms. And so it was definitely something that was substantial. [What] the donor was looking for was not just to give Bitcoin to a project where they would convert it to dollars which is what most nonprofits would want to do, that's the easiest thing to do.

But they were looking for projects that were willing to use Bitcoin in a transactional way, and they believed that Bitcoin being used would actually be more important than the monetary value of it. Itís been more than three years since the project got underway. Those involved say thereís been less crime.

Plus, many residents are now living with sturdier roofs over their heads. Renato Salazar helped fund the new construction with Bitcoin, on behalf of multiple donors. But now the families need to pay off their loans in Bitcoin too.

As you can see, itís concrete. 122 safe and stable homes in place of flimsier tin-roofed houses for 122 families. Not an insignificant number considering El Zonte only has a population of 3,000.

The community members donít only mix concrete, they also learn how to pay in Bitcoin via their smartphones. They don't have bank accounts. They don't have access to any financial system here, any financial program.

They don't have access to loans. They don't have access to insurance. They don't have access to anything, right?

So it would have been impossible for them to get a home like this. El Zonte is considered a test case for the future of money. No matter oneís capital, everyone here rich or poor can conduct business within a decentralized system.

No dollars, no banks, no banknotes. Is Bitcoin a better and more ethical type of money? Can it replace standard currencies?

Could it help alleviate the pressure on the worldís poorest populations? There are many influencers and advocates who back Bitcoin: Are they doing so in the name of economic justice? They're doing it because they're trying to make the world a better place.

They truly believe that Bitcoin is good for people. And honestly, I understand that argument. There are many legitimate reasons why Bitcoin can be positive.

Frankfurt is Europeís banking capital. Here, the development of cryptocurrencies isnít perceived as positively. The European Central Bank or E-C-B is especially critical of Bitcoin.

At the end of 2022, the E-C-B published a blog post lambasting Bitcoin. It was regarded as something of a declaration of war. The authors classified Bitcoin not as an innovation, but as a ìspeculative bubble,î and wrote that Bitcoin is taking its ìlast standî while investors stubbornly hang on.

One of the authors is Ulrich Bindseil. If we have a new speculative Bitcoin bubble, society is worse off than if the whole craze passed. For the E-C-B, the idea of creating money without its oversight is simply unthinkable.

It alone has the right to print the cash it deems necessary. It opposes circumventing banks to transfer money because that weakens the role of banks. With its independence and global reach, Bitcoin is a nightmare for authorities especially considering the speculation on its increase in value.

Bitcoin is not suited as a means of payment because its value is highly unstable. And a means of payment should not double as a speculative investment. Both these factors come together here.

And people are being wooed with a positive narrative that the price of Bitcoin will continue to rise. Every Bitcoin transaction is stored as a code on whatís called a "blockchain. î Whatís unique is that the entire blockchain is stored identically on a network of thousands of computers.

This is what makes Bitcoin a decentralized currency outside the control of the E-C-B or other banks. Bitcoin was created in 2008 and outlined in this paper, authored by Satoshi Nakamoto. The authorís real identity is unknown.

Itís not even clear if thereís just one person behind Bitcoin or several people. The first bitcoin cost just 0. 06 euro cents.

In 2021, Bitcoinís worth shot up to over 58 thousand euros. A 5 cent investment early on would have equalled about 5 million euros 11 years later at least, briefly. The total amount of Bitcoins will be capped at around 21 million.

Itís stipulated in the source code that there wonít be any more beyond that. Which is why many people believe scarcity will drive the price up. While leaders at the European Central Bank regard Bitcoin as highly speculative researchers at the nearby Frankfurt School of Finance and Management take a very different stance.

Just because Mr Bindseil works for the European Central Bank doesnít automatically mean heís right. Only time will tell. I honestly find it rather puzzling that the E-C-B has opted to run a PR campaign against Bitcoin.

In my view, Bitcoin is not necessarily an enemy of the euro. The researchers donít regard Bitcoin as a traditional means of payment: They see it as more of an investment. Similar to investing in gold, hoping that its value will increase over time.

The researchers donít believe Bitcoin will function as money on a global scale. Thereís a relatively high volatility with Bitcoin. One day the price is through the roof; the next it takes a nosedive.

Itís impossible to establish prices that way. Plus, itís not accepted widely enough. When you dine out or fuel your car, you can pay in euros anywhere.

Paying with Bitcoin is rarely an option. But a recent development could work in cryptoís favor. One of the main objectives of the European Central Bank is to prevent high inflation.

And lately, it hasnít been succeeding. Everything is becoming more expensive. The value of money is falling.

If this stretches on year after year, weíll see that certain groups in society will face considerable challenges, as costs go up and while wages, for example, donít. And I think the importance of Bitcoin will grow during this same period. Very few businesses in Europe accept Bitcoin.

Critics say cryptocurrency enables cybercrime. Buying goods and services in the mainstream economy is very difficult using a cryptocurrency. And so, the main use case for purchasing goods and services using cryptocurrency is illegal activity for the most part.

So whether it is something like ransomware or you know buying drugs or, you know, maybe you want to hire a hitman, then yeah, Bitcoin is fantastic for that purpose. Thatís one reason why most lawmakers donít want to see free trade happening in cryptocurrencies at all. Large regulated crypto exchanges are meant to oversee Bitcoin transactions, thereby deterring criminals.

Customersí identities must be verified before they can buy Bitcoin, and profits can be taxed. Customers receive an account known as a ìwallet. î If they exchange euros for Bitcoin, for example, those assets end up in their wallet.

This is the point where the state has access. Where am I depositing euros into the crypto exchange and which wallet are the euros coming out of? And if the state has the feeling thereís a fraudster in the mix, it can approach the crypto exchange and say: Dear crypto exchange, does Mr X or Ms.

Y own Bitcoin? If so, please share their wallet details. We need to see what's going on.

Los Angeles. In California, defying norms is the norm. Many here love cryptocurrency because it aligns with their politics.

Freedom and independence from the state are core Bitcoin values. It plays on contrasts outsiders versus the establishment, rich versus poor, new versus old. Hey babes, multiple big stocks on a global scale, not just in the US.

Apparently, thereís MATIC drama Two crazy things happened in crypto last night. Hereís what you need to know. One of them could involve Just in, FOMC [Federal Open Market Committee] update!

Boxing and Bitcoin have a lot in common at least, according to one of the worldís most successful crypto-influencers. Theyíre both charged with symbolism: To go your own way, youíll have to fight for it. It's about the underdogs and having control of your actions and using critical thinking.

Change is coming. But this romantic idea of a crypto utopia is unraveling. In 2022, several crypto apps and exchanges plunged users into financial ruin.

The biggest scandal of all was the bankruptcy of F-T-X, the crypto exchange founded by Sam Bankman-Fried. He was accused of stealing billions from customers. In November 2023, a New York court convicted him.

He was found guilty on seven counts of fraud and conspiracy. I'm not discounting Sam. He did absolutely terrible things very, very bad things.

He lied, he stole, he practiced unethical behaviors. But at the same time, we have bad actors in every single industry and we're going to continue to have bad actors in crypto. It's unfortunately human nature.

But to sit and to single him out and not pay attention to what some of the other bankers and what the other public servants are doing, would be a disservice to the American people and people in general in the world. Before being convicted, Bankman-Fried lived here with his parents, on a bail bond of 250-million US dollars. His situation, not unlike those faced in major bank failures.

That collapse is like so many other financial institution collapses that we've seen over the years, right? You have effectively an entity that is heavily reliant on leverage, which is placing big bets and then covering over those bets with more bets. And any time you have an institution which is debt financed, they're going to run into some trouble.

In the US, unregulated crypto exchanges long dominated the market. No authority felt responsible for cryptocurrencies such as Bitcoin or the number two cryptocurrency, Ethereum. You have around 8 million holders of Bitcoin and Ethereum in Germany and there are ìonlyî Iím saying that in quotes 20,000 FTX victims.

This shows that regulation has had a positive effect here. I would argue regulation is necessary and long overdue in America to prevent further damage. Many feel the temptation to make big money with Bitcoin.

Ultimately, Iíd say it comes down to speculative investments and Bitcoin holdersí vision that the value of Bitcoin will keep rising. That suggests that we have an asset class here that you can invest in and somehow secure a fantastic future. And of course you need to maintain a narrative about what it's useful for.

So they say it could be useful for payment transactions. He's entitled to his opinion. However, I've done pretty well with Bitcoin, with trading it, with holding it, with using it to transact.

And I haven't had anybody really tell me what to do with that. So, I mean, that's his opinion and I'm sorry he feels that way. But if you look at the United States of America banking system and all the bonds and the traditional financial investments we have, they're not really doing too great either.

There are more than 8,000 cryptocurrencies out there. Theyíre offered on a myriad of crypto exchanges not to mention the countless obscure providers advertised on social media. The industry is a shark tank.

It has been hijacked in large part by opportunists, con artists right? Scammers. I know many, many people have lost enormous amounts of money in these markets.

It's a classic kind of bubble. Now, that's not to say that there isn't, right, really amazing technology that sits underneath it. Recently, thereís been a shift in the US.

Users on crypto exchanges are now obliged to provide nearly as much personal information as they would need to when opening a traditional bank account. A far cry from the independence crypto promised. Effectively we've recreated kind of like a traditional banking system on top of these cryptocurrencies.

And I think most people who use them don't realize that they're back using an institution which is very similar to the ones that they think they have fled. WendyO wants to conduct business independently of banks. That's why she stays clear of regulated crypto exchanges.

She opts for the more technically advanced route of trading directly from person to person known as ìpeer to peer. î When you're using a third-party exchange like a Binance or a Coinbase or Gemini, understand: That is a third party. They are holding your cryptocurrency.

If that exchange goes down, you can lose your money. For most people, learning the jargon and inner workings of the complicated technology is too time consuming. Crypto exchanges are a far simpler option.

But WendyO only trusts herself and Bitcoin in its original conception. Her Bitcoin is stored in her own wallet. There's no third party that's monitoring you, that's tracking you, that's taking your information and then selling it to somebody else.

Bitcoin doesn't do that. These third parties, they do. WendyO is part of a close-knit community of Bitcoin users that distrusts banks.

For them, the notion that this new monetary system should be regulated the same way as the traditional banking system is out of the question. Our public servants, that's what I like to call them. They're just a bunch of people with these very expensive pieces of paper degrees or they come from really great families, or they've got connections.

They're just regular human beings. They don't necessarily know more than us. If you want to buy a home, if you want to rent, if you want to get an education, if you want to buy a car, food, whatever that may be, you have to have a bank account.

But will the banks stand idly by as people like WendyO try to chip away their power and destroy their business? La DÈfense, a business district just outside Paris, is home to the headquarters of one of the oldest banks in the country. SociÈtÈ GÈnÈraleís influence in the crypto business is already far greater than many Bitcoin users can imagine.

Recently, SociÈtÈ GÈnÈrale integrated a subsidiary called FORGE. CEO Jean-Marc Stenger is spearheading a small team leading one of the banking world's most ambitious projects in the realm of crypto. We believe that weíre entering a new era of financial markets and money.

Weíre on the verge of a very radical and profound change when it comes to blockchain especially in regard to how financial services are supplied to the customer. When it comes to these services, a fundamental revolution is on the horizon. SociÈtÈ GÈnÈrale has long been working to secure its position on the forefront of this revolution.

Itís allowed to trade in cryptocurrencies, offer wallets, and it supports authorities by regulating crypto traders. The French bank wants to make big money by leveraging blockchain technology for equity trades. Financial institutions or companies will only issue shares or bonds digitally.

Theyíll only exist in digital form on the blockchain. And that's what interests our customers the ability to be faster, safer, and cheaper. In the future, selling shares wouldnít be limited to the stock exchange.

Instead, they would be programmed on a blockchain and traded from there. In the business world, these are known as ìsmart contracts. î And powerful financial players have embraced this new business model.

New York is home to the largest stock exchange in the world. This is where big deals are struck. Until now, the field was clearly divided.

Banks, brokers, and hedge fund traders speculated in pretty much anything that could turn a profit. Cryptocurrencies are sold outside of Wall Streetís purview. But, in early 2024, US authorities allowed Bitcoin ETFs to be traded on the stock exchange for the first time.

If you owned all of the Bitcoin in the world and you offered it to me for $25, I wouldn't take it, because what would I do with it? I'll have to sell it back to you one way or another. It isnít going to do anything.

The apartments are going to produce rent and the farms are going to produce food. Stock market tycoon Warren Buffett doesnít see any intrinsic value in Bitcoin so why should he speculate on it? Ultimately, itís a series of numbers that offers no immediate benefit.

Many traditional financial managers, not only in New York, see this as its biggest shortcoming. But that attitude is gradually changing. Jordi Visser is the president of a hedge fund that manages over 4 billion dollars.

He sees himself as a pioneer and is very interested in Bitcoin and other cryptocurrencies. No one, no one can argue with the fact that the concept of the blockchain is a great idea as a technology, whether we're able to use it in the manner that we hope is an argument that people can debate. But I think it's certainly going to be here and I think it's something that we need.

So I see it as the birthplace of an innovation which is going to help us get more authenticity to a world that has values on assets that are really hard to prove that they're worth what they are. Many of Jordi Visser's colleagues advise against investing in Bitcoin because of the dramatic fluctuations in its value. But surprisingly, evaluations made by his financial advisers tell a different story.

Bitcoin's volatility has been declining. Last year [in 2022], when people talk about the volatility of Bitcoin, I forget the final numbers, but US technology stocks were down almost as much Amazon was down almost as much as Bitcoin last year. So what's the difference between people having a large weight in Amazon that was down significantly and in Bitcoin?

I think we've gotten to the point where the volatility has been declining for years. It will continue to decline as it becomes a more accepted asset class. In 2022, Bitcoinís value dropped 60 percent, to around 15,500 euros.

In the same time frame, Amazon was down 47 percent. And the Dow Jones Industrial Average, an index of 30 major companies in the US, was down 9 percent. In 2023, Bitcoinís value recovered, and fluctuated between 20 and 30 thousand euros.

Leading experts from the worldís financial hubs at least agree on one thing: The technology behind Bitcoin is ingenious. And itís well on its way to becoming an investment that generates a return. Bitcoin is very much like gold.

And what I mean by that is it's a terrible medium of exchange, but it's a wonderful store of value. And I do think that we'll continue to see Bitcoin. Plattsburgh is a small city in New York, close to the Canadian border.

Twenty thousand residents, harsh winters, and no major tourist attractions unless you count this building a former discount retailer. In 2018, it became one of the largest Bitcoin mining operations in the world. Bitcoin is still mined here today.

The somewhat rundown building houses thousands of computers. All day, their sole purpose is to figure out codes. Ideally, every 10 minutes.

Each block they crack is worth 6. 25 Bitcoin. Validating each block is so complex that a single computer would take a very long time.

So countless companies set up thousands of computers to increase their odds. It's an ongoing race: Whoever cracks the code the fastest gets the reward. In 2018, miners were generating 1,800 Bitcoins per day.

But the problem is: all these computers constantly mining Bitcoin consume massive amounts of electricity. When the price of Bitcoin was higher, it was estimated that its electricity consumption worldwide was equivalent to that of the Netherlands. And in times of climate change and energy scarcity, that's simply not good for a thing thatís value to society is unclear.

ìBitcoin is so bad for the environment, itís so dangerous. î Well, so is printing money. So is driving a car.

So is the lighting here. So is you and I breathing, existing. Yes.

Bitcoin does leave itty bitty carbon footprint, but so do a lot of these other things. Is the environmental impact of Bitcoin mining overblown or is it a serious concern? Plattsburgh can provide some answers.

On a global scale, electricity here is extremely cheap. It comes from a hydroelectric power plant on the Niagara River. Thatís what attracted the company Coinmint to set up its huge mining operation in the first place.

The new company promised jobs and a boost in tax revenue. But gradually, people learned the reality of the businessís impact was very different. Basically itís all about computers, itís all I know about it.

I donít like it, its an ugly place. I canít go in there and shop. They use a lot of electricity.

It has raised our place in electric and they didnít say thatís the reason, but itís the talk and also it has caused the family dollar here, it used to be over there and went the whole winter without heat because of the operation in the back they always had the doors open because the machines working with the Bitcoin you know, they have to constantly run to do the cryptocurrency. Around the time Coinmint set up shop, Colin Read became mayor of Plattsburgh. He teaches about banking and sustainability at the state university.

He was appalled to learn that on some days, this building consumed one third of all the electricity in his city of 20,000 residents. These machines run 1500 to 3000 watts, very similar to a space heater, generally the same amount of heat. So to control that heat, if you have, you know, three to 10,000 machines like that in this room, you need to draw in a bunch of cold air and expel a bunch of hot air.

So any Bitcoin mine operation is going to have a lot of holes in the wall, a lot of holes in the roof. Fans everywhere. In the summertime they generate a lot of noise because those fans need really need to run continuously when the weather is hot.

The Bitcoin mining operation proved to be a massive disruption for the residents of Plattsburgh. The cheap power supply generated from the Niagara River was not enough. The price of electricity suddenly shot up.

For local companies like this paper mill, production became untenable. Colin Read then forced the Bitcoin mining firm to pay for the extra electricity on its own. The company responded with a PR campaign.

I've seen many pictures from some very sophisticated with hundreds of millions of dollars of Wall Street venture capital money behind them, you know, the Italian shoes and suits and all that kind of stuff. They've got a trade association that helps them do the talking points when they go into communities. After all, there is enormous potential in the business.

Colin Read calculated that the Puerto Rico-based company earned up to 50 million dollars a month at the start of its operation. Plattsburgh, a lower-income city, didnít see a dime. If they're making tens of millions of dollars of profit every month, surely there's going to be lots of flow back into the community.

But these are profits in Bitcoin that can be essentially cashed in anywhere. There's no reason to believe for any reason that this money will stay in the community. In the end, Plattsburgh did not rake in the promised tax dollars, nor were jobs created.

Instead, for a time, residents were saddled with expensive electricity bills. Meanwhile, the Bitcoin mining firm moved many of its computers to the next town, where electricity costs were lower. Colin Read is no longer mayor of Plattsburgh.

He wrote a book about cryptocurrencies. He was initially excited about blockchain technology, but heís been disillusioned. If you look at who controls the wealth of Bitcoin, it's large corporations, it's multi-millionaires, it's billionaires as venture capitalists, Wall Street, the complete entities that Bitcoin and Satoshi were designed to take out of the equation, now dominate the market.

Large companies are involved wherever digital money is replacing cash. US companies especially are at the forefront, with GooglePay, ApplePay and PayPal. The European monetary authorities are facing pressure on two sides: from Bitcoin and from large private US-based companies.

That's why the European Central Bank is turning its attention to developing the ìdigital euro. î We think the digital euro must also be there to continue to limit the market power of these global companies just as it works with cash. We need to ensure the strategic independence of Europe.

So the E-C-B also wants to get into the business of digital money. The digital euro, however, would be very different from the decentralized Bitcoin. Thatís because theoretically, every transaction by citizens could be monitored by the E-C-B.

The only reason why they want to use blockchain technology, the only reason why they want to create the CBDC, is they want to monitor people. They want to have control. They want to implement credit scores.

They want people to do exactly what they are told and instill fear that if you don't do what I say, I'm going to have access to your money. We have no interest in controlling people. When designing the digital euro, we want to make it so that we donít receive personal data in the Eurosystem, and instead have anonymous transactions in our books.

We don't want to know who has a particular account or who that person is. Thereís deep mistrust on both sides. Banks and states fear that a decentralized currency without state supervision will lead to crime and chaos.

Bitcoin users believe the state and banks want control. If you believe in courts and laws, then you shouldn't be too worried about this potential visibility. If you have little faith in the courts and laws, then yeah, perhaps this would be something to be worried about.

El Zonte has had the nickname ìBitcoin Beachî for a while now. But actually, all of El Salvador has become something of a test case for Bitcoin. Here, human rights are not guaranteed and the judiciary has very little power.

In 2021, it became the first country to recognize Bitcoin as legal tender a move spearheaded by populist president, Nayib Bukele. This was this unique opportunity for them. They saw this as wow, how else could we literally overnight have El Salvador known throughout the world, be in all these articles?

Have people change the narrative that even if people are speaking negative, they're talking about the money and the tech rather than the gangs and the murder. The beginning of the Bitcoin era in El Salvador was celebrated with great fanfare. Thousands of crypto enthusiasts cheered on their rock star leader.

Nayib Bukele projected himself as a cross between a baseball cap-wearing rapper and a savior. And he made his stance on Bitcoin clear. This is not a good or cool or nice idea.

This is the evolution of humankind. So weíre going there. You canít stop evolution.

This ìevolutionî was heavily promoted in El Salvador. Every citizen who downloaded Chivo, the state-run Bitcoin wallet app, received 30 dollars-worth of Bitcoin as a gift. A controversial means of winning people over.

Maybe he understood Bitcoin, maybe heís crazy, maybe heís running an experiment, we just donít know. It could have been any country. Honestly for me it's not relevant that itís El Salvador.

Whatís important is that a country somewhere in the world dared to take this step, and Iím fairly certain that other countries will follow, even if it takes a few more years. The reality is: There are only a few stores in El Salvadorís capital that actually accept Bitcoin. Especially after its value dropped at the end of 2022.

Most people use the dollar. Can one pay in Bitcoin? Nope, not here.

Too hard? I never tried it. Not at the moment, no oneís come to explain how it works.

Unfortunately, my children's school or my son's university doesnít accept payments in Bitcoin. According to a survey, 70 percent of El Salvadorís population distrust the new legal tender. Many businesses that accept Bitcoin immediately exchange for dollars.

But the Bitcoin community abroad remains enthusiastic. I absolutely love what he's doing because by making Bitcoin legal tender, he's essentially taking power back for his country and telling everybody else in the world: This is what we're doing. And I'm trying to improve the quality of life of my people the best way I can.

In reality, Bukele wants to make his country independent from the influence of foreign institutions like the International Monetary Fund. If Salvadorans buy Bitcoin without the state-run Chivo app, their assets would be safe from their own governmentís influence. Imagine we live in a country with unstable institutions, and I have 5,000 currency units in my account not necessarily in euro.

The state doesn't like it. So what does it do? It could potentially take the money away from me.

In other words, a kind of expropriation or confiscation is possible if the value is determined from the outside, by a state or a banking system or government or a central bank. But itís not possible with Bitcoin. El Salvador has become a place of pilgrimage for Bitcoin believers.

There are even plans to build a "Bitcoin City. î Traders, crypto miners, and entrepreneurs would live and work together there. The president's cousin is trying to attract investors and startups.

So far, a huge crypto city at the foot of a volcano is still a pipe dream. You get zero percent income tax, zero percent capital gains, property tax, payroll tax, municipal taxes, and zero percent to CO2 emissions. Building this new financial hub would cost an estimated one billion dollars in one of the poorest countries in the world, where the average annual income is about 4 thousand euros.

Nayib Bukele is counting on support and funding from abroad. Iím fully convinced that sooner or later there will be Bitcoin cities. There are people who want to be engaged in this community.

So theyíll pack up and suddenly start moving to El Salvador. It's a bit like religions in the past, where believers would gather in monasteries or elsewhere and live and do things together. Money is based on trust and belief.

Cryptocurrencies have added a new dimension to how we think about money. El Salvador is reflective of the fear and hope surrounding Bitcoin. But cryptocurrencies have already changed the world.

And in all likelihood, itís just the beginning.