The Top 5 Biggest Crypto Cities and Communities

It is an undeniable fact that cryptocurrency is the beginning of a new era. DeFi (decentralized finance), DEX (decentralized exchange), and numerous different kinds of crypto tokens are part of our lives now. Although terms such as ‘decentralized’ or ‘NFT’ or ‘metaverse’ or ‘crypto tokens’ are quite new and difficult to internalize for people, we should agree on some point; many of us use it or are involved in it one way or another. First, let us give you some information about the short timeline of the digital money concept.

Even though cryptocurrency has been known and paid attention to for the last two-three years, this significant invention dates back to the 1980s. David Chaum, an American cryptographer, played a crucial role in this development. In 1983, Chaum introduced eCash, an electronic money system, and later established DigiCash in 1990, a company that further advanced the concept of electronic money. Chaum's pioneering work, particularly in Blind Signature technology, built the foundation for the cryptocurrency system we know today. In 1998, the term "cryptocurrency" was used for the first time when Wei Dai, a Chinese computer engineer, invented the b-money electronic money system. This milestone further contributed to the evolution of cryptocurrency technology.

The global economic crisis of 2008 had a huge impact on people's trust in centralized authorities, leading individuals to search for alternative savings and investment methods that operate independently from institutions such as governments and banks (this is the main reason behind the idea of decentralization).

The search to remove the bank or any other centralized third party from the system resulted in the discovery of the distribution of many copies of transactions to many ledgers which are actually computers around the world.

At that point, Bitcoin was the leading example of cryptocurrency. Bitcoin was developed and released in 2009 by an anonymous individual or group known as Satoshi Nakamoto. The true identity of Satoshi Nakamoto remains unknown to this day.

Since then, the demand for cryptocurrencies has increased worldwide. As of January 2021, there were approximately 5,000 different types of cryptocurrencies available. According to the information on Forbes, CoinMarketCap which is the provider of crypto data reports that there are approximately 23,000 cryptocurrencies, with a total market capitalization of $1.1 trillion. These numbers show us how the popularity of crypto is growing and becoming global technology in today’s global world.

In decentralized finance, as the number of cryptocurrencies increases, also new demands do. For instance, people need to exchange their crypto tokens (crypto money). In the context of cryptocurrencies, swapping refers to the process of exchanging one cryptocurrency or token for an equivalent value in another cryptocurrency or token. It provides a convenient way to acquire a specific digital asset even if you hold a different cryptocurrency. For instance, if you need to purchase something using X tokens but only possess Y tokens, you can utilize a crypto swap service to exchange your Ys for Xs. With the purpose of crypto swapping, a lot of swapping services have emerged. Anyone can use easily those crypto-swapping services such as Pancakeswap, Uniswap, or Sushiswap, etc. to exchange their tokens and use them in any kind of trade.

Besides that, individuals who have cryptocurrencies can prefer other activities with them. The most common choices that token holders choose are:

Hold: Many people choose to hold onto their crypto tokens as a long-term investment, expecting that the value will increase over time.

Trade: Crypto tokens can be actively traded on various cryptocurrency exchanges. Traders aim to profit from short-term price movements by buying low and selling high.

Invest: Some individuals invest in crypto tokens with a specific investment strategy or goal in mind, such as participating in initial coin offerings (ICOs), decentralized finance (DeFi) projects, or other promising ventures.

Staking: Staking involves locking up crypto tokens in a blockchain network to support its operations, confirm transactions, and potentially earn rewards in return.

Lending and Borrowing: Crypto tokens can be lent to other users through lending platforms, allowing token holders to earn interest on their holdings. Conversely, individuals can borrow crypto tokens against collateral for various purposes.

Yield Farming: Yield farming involves providing liquidity to decentralized finance protocols in exchange for earning additional tokens or rewards.

Participating in Governance: Some crypto tokens provide holders with governance rights, allowing them to participate in decision-making processes regarding the future development and direction of the associated blockchain project.

Swapping and Exchanging: Crypto tokens can be swapped or exchanged for other tokens using decentralized exchanges (DEXs) or centralized exchanges (CEXs), enabling users to diversify their holdings or acquire specific assets.

Donating and Tipping: Crypto tokens can be donated to charities or content creators as a way of supporting causes or showing appreciation.

Collateral for Loans: Some platforms allow users to utilize their crypto tokens as collateral to secure loans in traditional currencies or stablecoins.

Tokenized Assets: Crypto tokens can represent ownership in real-world assets such as real estate, art, or commodities, providing fractional ownership and potential liquidity.

As we see on the list, the cryptocurrency finance world has a wide range of services, networks, and platforms. It is not possible to explain all the aspects of it. We tried to put some light on it just a little bit. However, new questions come to mind. Do we actually use these crypto tokens in the real world? If the answer is yes, so where?

You can trade, swap, and farm your crypto tokens but on the other hand, you can use them literally. Yes! It is true! It is possible to pay with crypto tokens for your coffee because another use of cryptocurrencies is to use as a Medium of Exchange: Crypto tokens can be used as a means of payment or as a medium of exchange for goods and services, provided that the recipient accepts cryptocurrencies.

Bitcoin Cities All Around The World

Although the concept of digital assets and the idea of using crypto tokens instead of money may disturb some people, a lot of people already have begun to use it in their daily lives. We know that a great number of shops, stores, restaurants, cafes, bars, and other business places accept cryptocurrency as a payment or in any kind of transaction in many cities such as San Francisco, Vancouver, Amsterdam, New York, London, Miami, El Salvador, etc. all around the world.

In order to decide which city or place is ‘Bitcoin City’ we check three criteria:

San Francisco

San Francisco, known as the technology capital of the United States, holds a prominent position in our Bitcoin Cities. It is the headquarters of renowned cryptocurrency trading platforms Coinbase and Kraken, which contribute to its status as a key hub for the crypto industry.

Moreover, in San Francisco, there are a significant number of merchants that accept Bitcoin. With over a hundred businesses, including restaurants, bars, hostels, and stores, embracing cryptocurrency as a payment option, the city offers a wide range of options for Bitcoin users.

In terms of accessibility, San Francisco provides an impressive network of Bitcoin ATMs. With the hundreds of Bitcoin ATMs in the region, residents and visitors have convenient access to cryptocurrency services.

This is particularly impressive considering San Francisco's relatively small population (less than a million). The city's successful crypto ecosystem, combined with its technological innovation and the presence of major industry players, has undoubtedly contributed to its prominent position among the Bitcoin Cities.

Vancouver

Canada has a supportive community for Bitcoin and cryptocurrencies, In this context, Vancouver, a city in Canada, has emerged as a notable hub for Bitcoin-related activities. Vancouver was home to QuadrigaCX, an invalid cryptocurrency exchange that unfortunately faced significant challenges. Following the death of its founder, the exchange lost C$180 million in client funds, resulting in a notable incident within the cryptocurrency industry.

However, despite this setback, Vancouver showcases a positive aspect of Bitcoin adoption with more than fifty merchants in the city and its surrounding suburbs accepting Bitcoin as a form of payment. Additionally, individuals in Vancouver have access to many locations where they can buy Bitcoin, facilitating the acquisition of digital assets.

Furthermore, Vancouver holds a significant historical milestone for Bitcoin. On October 29, 2013, the world's first Bitcoin ATM commenced operations at Waves Coffee House in downtown Vancouver, offering users a convenient way to buy and sell Bitcoin.

With a population of over 631,000 residents, Vancouver demonstrates the potential for Bitcoin adoption and the integration of cryptocurrencies into everyday transactions within a mid-sized city in Canada. The presence of a strong Bitcoin community, coupled with regulatory support, contributes to Vancouver's position as a notable center for cryptocurrency activities in the country.

London, Florida, Amsterdam, etc. (the list of cities where Bitcoin is used goes on), and countless cities around the world have begun to use cryptocurrencies especially Bitcoin which is a widespread and famous cryptocurrency today. In these cities, people can use Bitcoin ATMs, and pay with Bitcoin for their lunch in the restaurant, or in bike repair shops, barbers, coffee shops, and thousands of shops.

Countries Accepting Bitcoin as Legal Currency

We know that in many cities, Bitcoin is used but what do the governments think about the idea of digital money? Are they okay with this idea? Let us give you some information about the official background of the subject.

Of course, according to the governments that have conservative and chary behaviours in case of taking big steps, especially in the field of economics, the cryptocurrency project is quite new and ambiguous.

The legal acceptance of cryptocurrencies, particularly Bitcoin, varies across countries. While the majority of countries have not yet officially recognizing Bitcoin as a legal currency, there are indeed a few exceptions where Bitcoin has been given legal status. A first notable example that has accepted Bitcoin as a legal currency is El Salvador.

El Salvador

El Salvador made history in 2021 by becoming the first country to officially recognize Bitcoin as a legal currency. The decision was driven by the goal of encouraging economic development and addressing the financial limitations faced by a significant portion of the population. The resolution approving the acceptance of Bitcoin as a legal tender was passed by the country's parliament and came into effect on September 7, 2021.

In May 2022, President Nayib Bukele of El Salvador announced ambitious plans to establish an epochal smart city centered around the use of Bitcoin (BTC) as its primary cryptocurrency. This innovative idea, known as 'Bitcoin City,' would be fully funded by Bitcoin-based bonds and strategically located in Conchagua, La Unión. As the world's first city of its kind, Bitcoin City aims to showcase the potential and benefits of a cryptocurrency-based ecosystem within an urban setting.

As a result, Bitcoin became an accepted form of payment alongside the US Dollar, allowing citizens to use it for various transactions within the country. El Salvador's adoption of Bitcoin as a legal currency received significant attention worldwide, particularly within the Bitcoin community. The move served as a pioneering example for other nations considering similar steps in embracing cryptocurrencies.

Special Design for the Special City

President Nayib Bukele of El Salvador has shown plans for a unique cryptocurrency-funded city, designed by architecture studio FR-EE, that is set to be built on the slopes of a volcano in the southern region of the country. In a tweet, President Bukele shared a model of the city, expressing his excitement with the caption "Bitcoin City is coming along beautifully." The project, funded through the sale of a Bitcoin bond, will be situated along the coastal area of the Gulf of Fonseca. Notably, the city will farm geothermal energy from the nearby Conchagua volcano to power its operations. The circular layout of Bitcoin City is inspired by the shape of a Bitcoin. The use of geothermal energy will also support Bitcoin mining, a process known for its energy-intensive nature.

The Project of ‘Bitcoin Beach’

Bitcoin Beach emerged as a movement dedicated to showing the real potential of Bitcoin and ensuring that those who have been marginalized by the traditional banking system are the primary group that will benefit from it.

Bitcoin Beach works to create an inclusive financial ecosystem where individuals who have been excluded from traditional banking services can access the benefits and opportunities provided by Bitcoin. By leveraging the decentralized nature of cryptocurrencies, this movement aims to restore financial autonomy and empower individuals to take control of their financial well-being.

Bitcoin Beach stands as a symbol of the ongoing effort to ensure that the true potential of Bitcoin is realized for the benefit of all, particularly those who have been historically marginalized in the traditional financial system. By providing a pathway to financial inclusion, Bitcoin Beach tries to create a more equitable and empowering future for individuals and communities.

To promote the use of Bitcoin, the government of El Salvador implemented various initiatives. This included:

In 2020, the town received its first Bitcoin ATM, joining a network of 1,500 such machines being installed throughout the country as El Salvador took steps to adopt Bitcoin. This development provided residents and visitors with convenient access to cryptocurrency services.

As part of the adoption process, El Salvador has implemented various measures to promote the use of Bitcoin. For instance, cryptocurrency can now be used to pay taxes, providing an alternative method for meeting financial obligations to the government. Additionally, foreign investors will be excluded from capital gains taxes on their Bitcoin investments, aiming to attract international interest and investment in the country.

Furthermore, the national government has collaborated with enterprisers to introduce a simplified Bitcoin wallet, designed for low-fee transactions. This initiative aims to facilitate easier and more affordable Bitcoin transactions, making it accessible to a broader population.

Through these progressive steps, the small tourist town in El Salvador is positioning itself as a pioneer in embracing Bitcoin as the center of its economy. The adoption of Bitcoin as a legal tender, coupled with the government's support and the introduction of user-friendly infrastructure, sets the stage for Bitcoin Beach to establish itself as a unique destination, attracting both cryptocurrency enthusiasts and curious visitors from around the world.

How Does the Rest of the World Take This?

However, the decision also faced criticism and sparked debates regarding its potential impact on the country's economy. Some expressed concerns about the volatility of Bitcoin and its potential implications for financial stability.

The path taken by El Salvador has been viewed as a bold experiment and has attracted attention from around the world. The long-term effects of this decision on the country's economy and the global adoption of cryptocurrencies remain to be seen, as El Salvador continues to navigate the opportunities and challenges associated with its pioneering approach to Bitcoin as a legal currency.

El Salvador is the first example of acceptance of Bitcoin as a legal currency in the country but it is not the only one. Here are the other countries in which Bitcoin is officially recognized.

In April 2022, the Central African Republic (CAR) became the second nation in history to adopt Bitcoin as a legal tender. Let's argue what the consequences of this action were.

Short Failure Story of the Central African Republic

This move of the Central African Republic (CAR) was seen as a significant step towards embracing the potential benefits of cryptocurrencies for the country's economy. However, approximately a year later, the CAR decided to reverse its decision and no longer recognize Bitcoin as a legal tender.

Although the reasons behind this reversal are not explicitly stated, the reasons behind this failure have been seen as changing circumstances, evolving regulatory considerations, or challenges faced during the implementation process. It is easily said that the most important problem was the internet connection problem.

Limited internet access can cause a significant barrier to the widespread adoption of digital currencies like Bitcoin. In the case of the Central African Republic (CAR), where only around 10% of the population has internet access, it can undoubtedly defeat the success of any digital currency project, including Bitcoin.

Several South American countries, including Paraguay, Argentina, and Uruguay, have legalized the use of Bitcoin and other cryptocurrencies. Similarly, in Europe, countries such as Switzerland, Luxembourg, and Malta have also embraced Bitcoin and established legal frameworks to govern its use. By legally accepting Bitcoin, these nations have taken progressive steps to accommodate the evolving financial landscape and provide clarity and regulatory certainty for businesses and individuals engaging with cryptocurrencies.

What’s Europe’s opinion about Bitcoin?

Of course, Europe also follows and keeps up with the recent updates and developments in the field of cryptocurrency. In fact, recently the regulation which is called MICA (Markets in Crypto Assets) is on the top topic.

In May 2023, the European Union signed the MICA (European Markets in Crypto Assets) regulation, which serves as the primary framework for the status of Bitcoin (BTC) and cryptocurrencies in Europe, as well as potential future regulations. Recently, MICA has been officially published in the Official Journal of the European Union (OJEU), marking an important milestone in the enactment of crucial crypto licensing rules.

The publication of MICA in the OJEU sets the stage for its implementation, which will take effect within 20 days of its publication in the official gazette. However, it's important to note that certain provisions of MICA will come into force on June 30, 2024, while others will take effect on December 30, 2024. This phased approach allows for a structured implementation of the regulations outlined in MICA.

On the other hand, before those official decisions, some critical places have already embraced the use of Bitcoin. Let me give you some examples of these places.

The Crypto Valley Zug Canton - Switzerland

The Swiss city of Zug, often referred to as the "Crypto Valley," has gained recognition as the new Silicon Valley (Silicon Valley, located in Northern California, is well-known worldwide as an important center for high technology and innovation. Silicon Valley is home to numerous global technology companies, including giants like Apple, Google, Facebook, and many startups that have revolutionized industries with their groundbreaking advancements.) Ethereum co-founder Mihai Alisie named Zug the Crypto Valley due to the large number of companies dealing with cryptocurrency in the city.

When it comes to Ethereum, we should mention it. Ethereum, an open-source software, is a decentralized blockchain offering smart contract capabilities. Ether (ETH) is the native cryptocurrency within the Ethereum ecosystem. ETH has impressively solidified its status as the second-largest cryptocurrency in terms of market capitalization, following only behind Bitcoin. With its innovative approach, Ethereum continues to shape the landscape of blockchain technology, facilitating a wide range of applications and revolutionizing various industries. Moreover, it is important to note that the official development of the software that underlies Ethereum was initiated in early 2014 via a Swiss company known as Ethereum Switzerland GmbH. So, Zug is a significant place for the Ethereum network and Ethereum is one of the major reasons why Zug become a center for the cryptocurrency world.

It is easily said that another major reason is Zug’s crucial location. With its population of 30,000 and a location just a 30-minute drive south of Zurich, a prominent financial center, Zug has become a hub for cryptocurrency and blockchain-based startups. The city has attracted investors from around the world and is experiencing rapid growth in the field of cryptocurrency finance. Alongside traditional services such as legal and healthcare, Zug has become a magnet for tech-focused individuals and companies, boasting nearly 150 blockchain-related businesses. Notably, Zug has embraced blockchain technology by accepting cryptocurrencies like Bitcoin as a payment method for urban services provided to its residents. This progress is largely attributed to the efforts of the Crypto Valley Association (CVA), an organization dedicated to promoting the growth of the Swiss crypto space. The CVA has been influential in advocating for favorable regulatory conditions and has presented numerous draft laws to Swiss regulators, fostering the development of the cryptocurrency industry in Zug.

Furthermore, the canton of Zug, which was previously known for using the Swiss Franc as its currency and form of tax payment, has embraced the use of cryptocurrencies. Since February 2021, taxable individuals and businesses in Zug have had the option to pay their tax bills with Bitcoin (BTC) and Ether (ETH). Initially, there was a transaction limit set for this payment method; however, due to the growing demand and interest in using cryptocurrencies for tax payments, the authorities have significantly increased the transaction limit. This move demonstrates the willingness of Zug's authorities to adapt to evolving financial technologies.

Crypto-Friendly Communities Around the World

Besides these places that we mentioned above, of course, there are a number of places that make progress in the crypto finance development. Some countries or regions officially accept it, make some laws or regulations about it even pronounce it as legal tender, and built special cities for it. We tried to explain the outstanding examples of them.

Another country that is known as crypto-friendly is Brazil. The Federative Republic of Brazil has gained recognition as one of the most crypto-friendly nations globally, thanks to its progressive regulations and policies designed to encourage the widespread adoption of cryptocurrency and other digital assets among its public. Demonstrating its commitment to fostering a supportive environment for the crypto industry, Brazilian President Jair Bolsonaro signed a bill in December 2022 that established a comprehensive regulatory framework governing the use and trading of cryptocurrencies within the country. This landmark legislation marked an important milestone in Brazil's journey toward embracing the potential of blockchain technology and positioning itself as a leading player in the digital asset space.

Portugal is also a crypto-friendly country. Especially Portugal's tax-free cryptocurrency regulation attracts significant attention from cryptocurrency dealers and miners.

When we look at Asian countries to see whether they support and follow cryptocurrency developments, the general idea is that they are a little bit get behind the rest of the world. Although some countries like Indonesia, and the Philippines include crypto-supporter communities, some countries like Bangladesh, and China are crypto banners in this respect.

Closure: How should we read the signals?

However, it is clear that in the global world, we live in, it is not completely possible to ban or prevent the usage of or access to digital currency. As long as a person is able to connect to the internet, the crypto finance world is also accessible in the same way.

To sum up, we can obviously see the positive correlation between time and cryptocurrency. As time goes on, technology, especially digital technology, is taking big steps and improving gradually. As a result, cryptocurrency, tokens, decentralized platforms, and networks are undeniable parts of our lives. The number of people who use crypto or Digital assets in any way seems to increase day by day.

It is an inevitable fact that the sense of economy is changing from paper money to digital version. Further, in the near future, people will not only keep or invest in their cryptocurrencies but also use them in their daily lives. Bitcoin will be the method of payment when you shop or go to a restaurant. The number of countries that legalized cryptocurrencies will increase.

Let’s hope that this new era comes with new opportunities for us. These developments and improvements give us a chance to be luckier and bring prosperity and welfare to all of us.