Bitcoin Beach: What Happened When an El Salvador Surf Town Went Full Crypto
In issue #22 of the One Thing, we discussed Bitcoin's hierarchy of needs and what it takes for Bitcoin to achieve hyperbitcoinization. Well, we might be closer than we think with El Salvador passing the bill of legalizing Bitcoin as a legal tender in the nation and all of this couldn't be possible if it wasn't for a little surf town in El Zonte.
Dubbed the "Bitcoin Beach", today we're going to talk about this bitcoin experiment/project.
How Did It Start?
- It all started with this guy - Michael Peterson, a 47-year-old California native
- Peterson first came to El Zonte 17 years ago on a surfing trip and he fell in love with the place. Ever since then, he comes back during his offseasons and fund small development projects in the community with the local churches
- Then, in the early 2019s, he received an anonymous donation of Bitcoin. The donor told Peterson that he wanted to create a local economy that ran on Bitcoin, the only condition being that it wouldn’t be cashed out into a fiat currency
- Peterson grew intrigued and decided to go for it. He first started by paying teenagers Bitcoin to pick up trash along the river
- The project really kicked off when the pandemic hit and caused a major dip in the tourism industry, Peterson started making monthly transfers of about $35 in Bitcoin to 500 families around town
- This really encourages the local business to accept Bitcoin. Fast forward 18 months later, and roughly 90% of El Zonte’s households interact with Bitcoin daily
But that was just Phase 1 of the Bitcoin Beach project.
- Right now, the team is working to show locals the benefits of receiving funds in BTC from relatives in the US, instead of relying on expensive services from the traditional banking system
- For example, a son in the States wants to send $100 to her mom in El Zonte. Instead of paying Western Union $7 in fees and having Mom take an hour-long bus ride to the city to retrieve the money, Son can just send $100 in BTC over the Lightning network, which costs $0 and milliseconds for Mom to receive it. Mom can then use the $100 to buy groceries from the local stores that accept Bitcoin. SUCK IT BANKS
- The end goal of Bitcoin Beach is to be a tech hub for Bitcoin-related companies and to make young Salvadorans see a future that doesn't involve migrating to the US
This is an exciting time for all of us Bitcoiners but I'd be very interested in seeing what happens when we enter a bear market. It's cool to see the $50 in BTC you make go up to $60 in a bull market but what happens when it starts going down to $30? Then we could really see how effective Bitcoin is as a medium of exchange.
On a side note, I'm keeping my eyes on El Salvador. Similar to the late Lee Kuan Yew, President Bukele seems to believe in Machiavelli. Coupled with the rapid Bitcoin adoption, could El Salvador be the next Singapore?