TL; DR
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El Salvador uses Volcanos to mine Bitcoin, and you can now buy a government-backed 10-year ‘Volcano Bond’.
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You buy a Volcano Bond → the government will buy it back from you within 10 years → in the meantime you will receive 6.5% annual interest on your investment.
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Purchasing a Volcano Bond amounts to a bet on the idea that Bitcoin will make its way into global financial systems and become an integral part of global capital markets.
Full story
This feels like one of those “imagine if you could go back five years and tell your past self that this was about to become a reality” moments.
A sovereign government backs magic internet money powered by volcanoes.
Or rather, El Salvador is using Volcanos to mine Bitcoin, and you can now buy a government-backed 10-year ‘Volcano Bond’.
(What!?)
The basic idea is this:
You buy a Volcano Bond → the government will buy it back from you within 10 years → in the meantime you will receive 6.5% annual interest on your investment.
Bonds (as an investment vehicle) are more conservative than your great-uncle Ray, who used to tell you to “stop cursing” when you said “this sucks.”
When you buy a bond, you’re essentially trying to take the safest bet humanly possible.
But hey, ‘Bitcoin’? ‘Volcano mining’? These terms don’t exactly conjure up “safe, conservative investments.”
So what’s going on here?
From today’s perspective, purchasing a Volcano Bond seems like a bet on the idea that Bitcoin will find its way into global financial systems and become an integral part of global capital markets.
Because purchasing a Volcano Bond puts money in the pocket of a country that does just that (within its own borders).
If you think this is a winning strategy, you can probably rest assured that El Salvador can buy back/pay interest on any Volcano Bonds you buy.
What a time to be alive!
