The information below was taken from Bolivia Travel Guide
Potosí is the capital of the department of Potosí in Bolivia. It is at an altitude of 3,967 meters (13,015 feet) and has about 115,000 inhabitants. It is claimed to be the highest city in the world. It lays beneath the Cerro de Potosí — sometimes referred to as the Cerro Rico ("Rich Mountain”) — a mountain of silver ore, which has always dominated the city. Cerro de Potosi’s peak is 4,824 meters (15,827 feet) above sea level. Potosí was the richest province in the Spanish empire, providing a great percentage of the silver that was shipped to Europe.
Founded 1546 as a mining town, it soon produced fabulous wealth, becoming one of the largest cities in the Americas and the world with a population exceeding 200,000 people. In the Spanish language there is still a saying, “vale un Potosi” ("to be worth a Potosi” a fortune). For Europeans, Peru — Bolivia was part of the Viceroyalty of Perú and was known as Alto Perú before becoming independent — was a mythical land of riches. The city of San Luis Potosi in Mexico was named after Potosí in Bolivia. In the United States, the name Potosi was also given to lead-mining towns of Potosi, Wisconsin, Potosi Missouri, and also to the silver-mining town of Potosi, Nevada.
By the time Bolivian independence (1825), the mines of the Cerro Rico were almost exhausted. In the mid 19th century, a fall in silver prices hurt Potosi’s economy in a way from which it has never completely recovered. On December 11, 1987 (in Paris, France), the UNESCO declared the city of Potosí a "World Heritage Site" in recognition for its rich history and its wealth of colonial architecture.