In the south of El Salvador on the coast are El Zonte and Punta Mango, two small villages where bitcoin adoption is heyday. Together, the villages form Bitcoin Beach, an initiative that aims to help El Salvadorans catch up on technology with bitcoin.

It all started sometime in 2019 when an anonymous donor discovered that a long-forgotten USB stick contained a file from a bitcoin wallet containing a fortune in bitcoin. The donor had once bought them when a bitcoin only cost a few cents each, but then forgot about them and now suddenly had millions of bitcoins available.

The donor decided to do something good with the bitcoins: something that is good for the world, but also good for Bitcoin. Yet that is difficult, because most charities exchange bitcoins for regular money immediately upon receipt. That may be good for the charity in question, but it does little for bitcoin adoption.

Bitcoin Beach

Together with the American Michael Peterson, the donor therefore founded the Bitcoin Beach project; two villages on the coast of El Salvador where a circular bitcoin economy is being stimulated.

The aim of the project is to help the local population to catch up with technology and to give them access to international and digital payments via Bitcoin. To achieve this, Bitcoin Beach provides financial support in bitcoin to the local population and local shops and businesses are connected to the bitcoin network.

For example, in these beach communities, a self-sustaining economy must be created, where people earn and spend money in bitcoin.

A plan can be found on the Bitcoin Beach website that currently looks three years ahead and the latest developments are regularly shared via the associated Twitter account.

New

Many residents of El Zonte and Punta Mango come into contact with digital payments for the first time through the initiative; only 10% of the local population currently has a bank account. Usually the population is too poor to be of interest to banks or the necessary infrastructure is lacking. However, with Bitcoin, they need little more than a smartphone and a wallet application.

However, it did not go completely smoothly. Initially, people still needed a lot of explanation and help and the local business community also had to be connected. Much of the project’s efforts are therefore aimed at education and information. Also, not everyone was equally receptive. The slightly older age groups in particular struggled with the technology and found it too complicated, Peterson explained in a recent interview with Forbes.

According to him, the younger generation picked it up easily. Since the COVID-19 crisis, interest in bitcoin from the local community has noticeably increased.

“As we injected Bitcoin into the community, we also taught local businesses how to accept it and helped educate them on the advantages and drawbacks of accepting Bitcoin…There was a lot of resistance among the adults, [it was] too technical. So we moved on to youth, they picked it up right away. The key is to get them to start transacting right away, then they want to learn more about it, the security of it, and how it works” – Michael Peterson, in een interview met Forbes

Lightning Network

Although they mainly used normal on-chain bitcoin transactions in the beginning, the relatively high transaction costs for low amounts were often an obstacle. A large part of the local community has therefore switched to the Lightning Network, because bitcoin transactions are lightning fast and cost almost nothing. Wallet of Satoshi would be widely used within the community due to its ease of use.

“Originally, it didn’t make sense for 25 cent transactions, but did for 5 dollars. But when the transaction costs ramped up again, we switched over to the Lightning Network” – Michael Peterson, in an interview with Forbes

Adoption

The Bitcoin Beach project has been running for a while now and seems to have some success. It is now possible to pay with bitcoin at supermarkets, hairdressers, restaurants, nail salons and hardware stores. People can also use it to pay their water bills and soon their electricity.

The project also invests in local infrastructure and pays the construction workers in bitcoin. Young people who want to earn some extra money can do so by signing up for the youth program, where they receive bitcoin in exchange for chores such as cleaning up litter.

About 600 families receive direct financial support worth $35 USD worth of bitcoin every three weeks, which covers about half of their expenses. Bitcoin Beach also provides support to students through scholarships and by reimbursing travel expenses to school.

circulate

The hope is that the bitcoins will slowly but surely circulate among the population via these roads and that adoption will gradually increase in the area between the two villages. It should therefore become increasingly common for family who live and work abroad not to send dollars home, but bitcoins. Expensive exchange offices that take five to ten percent off the amount and the nearest one is an hour away, they no longer need.

“It is amazing what is happening here in El Zonte. We are preparing the kids of the future. They are used to it now – they can check their money on their cell phone, they are excited to save. This financial education is important. We never got that opportunity, and it?????s incredible the opportunities children have now. It makes them believe that there is a future in El Salvador. That they don?????t have to leave and go somewhere else to succeed…Our kids start dreaming again. They have time to be kids, to swim and to play. Bitcoin gives them freedom. ” – Roman Centeno, vrijwilliger Bitcoin Beach

Neem ook eens een kijkje op de website van Bitcoin Beach of volg hen via twitter voor regelmatige updates.